Commercials and online offers abound for home equity loans, consolidation loans and zero percent balance transfers on credit cards. Consumer debt grows annually, and these quick fix solutions seem like an easy way to reduce monthly bills and make day to day life easier. Unfortunately, these options do little to reduce your debt, and may place you in an even more vulnerable financial situation.
Homeowners in particular may be tempted by the home equity loan as an apparent quick fix solution to high monthly payments, surmounting debt, and growing interest rates. While this option may seem viable, practical and safe, even offering tax benefits, in reality it can place your home at risk. Your home is likely your most valuable asset, and placing it at risk in an attempt to bring your consumer debt under control is often a financially questionable decision.
If you are considering a home equity loan to manage your debt, it may seem like there are many positives to this solution. Interest rates are low, and if you are looking at high consumer debt, this may seem a reasonable way to eliminate your high interest credit card debt. Mortgage interest, including second mortgages, is typically tax deductible. However, homeowners should realize that the solution to debt is not taking on more debt, and placing the family home at risk of foreclosure is no remedy for excessive financial struggle.
Debt consolidation loans are another popular option for individuals struggling with consumer debt. These loans allow consumers to bundle their debt into a single monthly payment, and potentially reduce their overall interest rate. Consumers considering a consolidation loan should again realize that this does not offer debt reduction, and while it may make monthly bill paying more convenient, it will do little for your overall financial outlook.
Some consumers with credit card debt look to zero percent balance transfers to another credit card as a means of controlling debt. This option may be viable for those with a relatively small amount of consumer debt and a plan in place to pay off the credit card during the interest free or low interest introductory period. Substantial consumer debt cannot be managed via balance transfers, and if credit card debt is a problem, further solutions should be investigated. While a balance transfer may be a workable one time fix as a solution to debt management, if you have a pattern of simply moving debt from one credit card to another, this is a clear sign of financial difficulty and problems with debt management.
If consumer debt, medical bills, or other expenses are becoming a significant struggle, it can be time to seek compassionate and long term help with your debt. If consolidation and home equity loans offer risks and few benefits, what options are available to help individuals dealing with excessive debt? The only way to completely eliminate your debt in a timely manner is through a debt settlement program. Provanta Corp can help you pay off your debt, avoid bankruptcy, and painful monthly bills. Debt settlement allows you to move toward a new financial future with reasonable monthly payments that will eliminate your debt in just a few years, allowing you to look forward to debt free years to come.