| Getting a home equity loan, or second mortgage, for | | | | Debt consolidation loans are not free money. These |
| the sole intent ofconsolidating and ultimately eliminating | | | | loans have to berepaid within a reasonable timeframe. |
| unnecessary debts is a greatplan. Many consumers | | | | On average, home equity loans haveshort terms of |
| are burdened with high credit card balances,consumer | | | | seven, ten, or fifteen years - sometimes less. |
| loans, etc. Reducing or paying off debts takes time. | | | | Becausehome equity loans have fixed and lower |
| Furthermore,many do not have the disposable income | | | | rates, these loans are easier topayoff than credit |
| to lessen credit card balances. | | | | cards. |
| Owning a home places you at a huge advantage. | | | | Pros and Cons of Debt Consolidation Home Equity |
| Those who have builtequity in their homes may | | | | Loans |
| acquire a home equity loan as a way to reducedebts. | | | | The major advantage of home equity loans is the |
| These loans are affordable, and serve a useful | | | | ability to become debtfree. However, home equity |
| purpose. However,debt consolidation home equity | | | | loans involve careful planning. Once creditcards and |
| loans have certain risks. | | | | other loan balances are eliminated, closing credit |
| How Do Debt Consolidation Home Equity Loans | | | | accountsis a smart maneuver. This way, you avoid |
| Work? | | | | accumulating additional debts. |
| The concept of debt consolidation home equity loans is | | | | Sadly, some consumers repeat past credit mistakes. |
| simple. Homeequity loans are approved based on your | | | | Along with paying ahome equity loan, they acquire |
| home's equity. A home's equity canbe calculated by | | | | more credit card debt, which increasingtheir debts and |
| subtracting the amount owed from the home's | | | | payments. Excessive debt makes it difficult |
| marketvalue. Hence, if you owe $50,000 on a home | | | | orimpossible to maintain regular home equity loan |
| worth $120,000, the equitytotals $70,000. | | | | payments. This will presentanother home equity loan |
| Once the lending institution approves your loan request, | | | | danger - inability to repay the loan. A |
| and the moneyreceived, the funds are used to payoff | | | | hugedisadvantage of debt consolidation home equity |
| creditors. Creditors may includehigh interest credit card | | | | loans involves the risk oflosing your home. Before |
| balances, consumer loans, automobile loans,student | | | | accepting a loan, realistically analyze whetheryou can |
| loans, etc. Furthermore, debt consolidation can used to | | | | afford a second mortgage. |
| payoffpast due utility bills and medical bills. | | | | |