There are things hardwired into our brains. Our heart beats when we sleep, we breathe, we dream. When it comes to money problems, one of the automatic solutions people think of is the need to get a debt consolidation loan.
Getting a debt consolidation loan is not an automatic guarantee that it will solve the bad credit problem. A loan for debt consolidation can make sense it you have higher interest rate debt and want to refinance the debt with a new single loan.
Home Equity Loans
The easiest consolidation debt solution is to put up your house as collateral if you have equity. Banks and lenders are more willing to give you a debt consolidation loan if you put the house up because they will take your house if you don’t pay. While the home debt consolidation loan may have a lower interest rate it is simply because the lender has less risk in making the loan with your house pledged as collateral.
Loans for Bad Credit – Bad Credit Personal Loans
Credit Card Cash Advances
Borrowing money from your credit cards by taking cash advances in no way for credit debt consolidation to be effective. Taking out those high interest rate cash advances is almost always financial suicide. Don’t do it.
Borrowing From Friends and Family Members
While borrowing cash from your credit cards to consolidate debt is financial suicide, borrowing money from family and friends for debt consolidation is relationship suicide. It would be far better to get a legitimate debt consolidation loan from a place like Lending Club and have to pay interest than lose a precious relationship over some debt consolidation loan that goes bad. And I know what you are saying, “I promise I’ll make the debt consolidation payments.” That’s what everyone says, but no matter what, it can come between people and ruin relationships.