Differences Between Refinancing And
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Disclaimer: While we have done our best trying to give you all
information you need in order to consolidate your debt the right way,
it is highly suggested you get seasoned advise coming from debt
consolidation and debt settlement specialists, this is the safest way
to get your finance back in order, plus in the shortest period of
Differences Between Refinancing and Debt Consolidation?
It's little surprise that a growing number of homeowners today are struggling to pay
their bills. Unemployment continues to soar. Wages are stagnant. And many workers
lucky enough to still have jobs are seeing their hours cut. Many homeowners are
looking for solutions. They should know, though, that there are significant differences
between refinancing a mortgage loan and taking out a debt consolidation loan.
Both options can help consumers manage their debt. But they do so in dramatically
Homeowners can choose to refinance their existing mortgage loans to pay down their
debt. They do this by taking out what is known as a cash-out refinance loan.
Homeowners may have a home that that is worth $500,000. If they owe $300,000 on
that home, they then have $200,000 worth of equity. These homeowners can refinance
their current mortgage loan for $300,000 and then add a cash-out amount of $100,000.
They can use this money to pay down their debts.
Debt consolidation loans work differently. Many homeowners today owe money to
several creditors. Debt consolidation replaces these small loans with one large one. In
this way, borrowers can make one payment a month to pay off all their creditors. These
loans, then, don't reduce consumers' debt; they help them better manage it and pay it
Both methods of handling debt have their positives and negatives. But t