save 3 to 5 hundred dollars a month
Question: I recently consolidated all my bills with a home equity loan. they took all my monthly bills made them into a single payment and then put the loan out over a long period of time. I went from paying 486 dollars a month on all my bills to paying one bill of 176 dollars. There was no prepayment penalties at all, so when we get on our feet again, we can double up our payments or whatever, it is a good way to give yourself some breathing room if you need it. P.S. If you have bad credit (like me) there is a place that will still help you out anyway; gotta own a house though….
Answer: Sounds good, but a lot of people with poor credit do this to ‘get on their feet’. When they have some breathing room on their monthly debt payments, they go right back and start spending again until they hit their monthly limits. At some point, they don’t have enough equity in their houses to finance a debt consolidation loan and then must go into bankruptcy. Debt problems are usually a reflection of compulsive behaviors and aren’t repaired solely with a bandage.
Sound like the financial equivalent of ‘crack cocaine’ to me…. too easy, too dangerous, too accessible. It temporarily reduces the apparent scope of your problem so you can do it all over again.
And, the whole concept of a debt reduction loan is contrary to the subject of this NG, which is about living within one’s means.
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