Do you have many unpaid bills lying unopened on your desk? Are you finding it difficult and worrying trying to pay off all your debt? Have all your bills piled up till you find it quite difficult to pay them off together with your monthly income? This means that you might find it necessary to consider debt consolidation.
What is debt consolidation?
Debt consolidation is the process of putting all the debt that you are in together to make one lump sum amount and then paying this off in small monthly installments till you are debt free.
How does one consolidate his or her debt?
The way this is done is by borrowing a loan and paying off all of one’s debts once and for all with the money from this loan. After this is done, one has to pay back the loan in monthly installments. This is much easier because it is a definite amount of money that one has to cut from one’s paycheck every month and not many separate bills that add up to some large but vague amount of money.
Using a second bond
A second bond on your home will help you consolidate your debts and pay them off. Debt consolidation with second bonds is a very popular way of becoming debt free – and many people rely on this method. A second bond will keep your home as the collateral and let you have enough money to pay off all your debts. Also it will give you the chance to refinance your first loan to achieve better financial security.
Where does one go to get a second bond?
You can apply for a second mortgage in many different places – banks and loan companies are always looking out for people who need to refinance their homes, or use the loan to pay off their debts. Ask your own bank; ask your friends and family; a little bit of research online and offline will find you a lender. Look through different lenders and compare their interest rates so that you can make sure that the rates on the loan you finally get are not higher than the current interest rates.
What sort of credit does one have to have in order to get a second bond?
Most loan and mortgage companies will understand that since you are applying for a consolidation loan – your credits aren’t likely to be in excellent condition. Don’t worry if your credit history isn’t all that great – all you need to make sure of is whether you do have the financial ability to pay off the monthly installments for the second bond you are applying for. There is no point in going for refinancing if you are not able to get a better deal than the one you have. Interest rates on second bonds are usually higher than the rates on your first mortgage loan. Another obvious point that you have to remember is that you can only get a second bond if you own a home and already have a mortgage loan.