Benefits of Debt Consolidation from a Secure Home Equity Loan
By Rita Cook

Consumers are finding many ways to rid themselves of adjustable rate credit cards with secure home equity loans. Homeowners have an option non-homeowners do not have with secured debt consolidation loans that allow borrowers to combine all their monthly payments and roll them into one loan. Rather than paying a bunch of companies a monthly payment each month you will only have to pay one company. While there are quite a few pros and cons for debt consolidation loans, many people choose to take out a second mortgage or home equity loan to pay their bills down or completely off.

"The principle of a consolidation loan is simple," spells out the site Lendingtree.com. "You can take out a new loan at a lower rate than your existing debts, which may carry higher rates often charged by credit card companies and retailers." Since the new loan has a lower interest rate overall the new payment should be lower than the combined total of your old monthly payments.

According to the Lending Tree, "Home equity loans are available to refinance outstanding loans. Since the loan is secured by the equity you have in your home, the lender is able to give you a lower interest rate. Mortgage lenders will typically offer residential lending products up to 80% of your equity, although a few brokers will lend up to 125%."

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