Debt is better done without, but hey, all of us find
ourselves in a spot of bother sometime or the other. However, there is little
reason to worry about it, since there are tools meant specifically to deal with
this problem. Coming to one specific tool (which you may have figured out by
now), I’ve often had people asking me, “Is debt consolidation really worth it?”
My answer to that is always, “Yes! It definitely is.” There are two major reasons
(besides another one I’ll come to) why I say this-
1) It helps you reduce
your monthly debt
And
2) You don’t have to sit
and make individual payments (let’s not leave out the convenience factor)
After you’ve consolidated your debt, you’ll see that you need
to pay lesser every month than what you were paying earlier, though you may
have to repay the loan for a longer duration. While the amount will vary
depending on interest rates, a decrease in spending will definitely do your
bank balance a world of good.
For starters, I’d really like people to get over the
misconception that a home line of credit is a bad idea, since home equity loans
can actually go a long way in easing your financial troubles. Debt
consolidation is a win-win situation especially for home owners, since you can
avail a cash-out refinance from most places, which offers a smarter way to
manage your finances. The reason for this is pretty simple actually, since a
loan taken against a house guarantees the lender with surety and consequently a
certain sense of security. For us, this translates to lower interest rates,
thus proving a better option over most other types of loans.
A perhaps lesser known benefit in taking a home equity loan
comes in the form of tax deductions, since mortgage interests are often tax
deductible for people who itemize their deduction. However, be sure to check
with a professional in this regard.
Now that you know the benefits, make sure that you make the
best use of them. Just ensure you don’t to fall into the debt spiral again and
you’ll do great. Cheers!
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