are debt consolidation loans good or bad

Even at 10% to 12% interest, the rate would be lower than the 25% to 30% they may have on high - risk auto loans and credit cards. However, I know exactly how far too many people think

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If you pay of all your loans and only have the consolidated loan to repay it can be good. One payment vs. many payments. It is bad if you have the consolidated loan and then run the other accounts up again. Then you have all the payments back plus the big one
Better than filing bankruptcy. but in the long run you will pay more in interest I think. ;
That all depends on the borrower. and the subject property. If the borrower has learned their lesson and intends to NEVER get themselves in the same position again, they are very good. A debt consolidation loan from theirr home equity provided that they still have any in a declining market are a great idea. Even at 10% to 12% interest, the rate would be lower than the 25% to 30% they may have on high - risk auto loans and credit cards. However, I know exactly how far too many people think. I have often saved them from themselves with a debt consolidation loans, only to see them come back in a year with the same spending problem!. Debt consolidation loans only work in a STRONG housing market! Please be advised that underwriting guidelines have changed DRAMATICALLY over the past year. You may not be able to obtain a cash - out mortgage for more than 90% Loan - To - Value LTV on your home, and 75% LTV on investment properties. I am most people in this position may alead exceed the levels, thus they will never qualify - even if they have credit scores well into the 700s!. I received a call from a close friend with credit scores in the 780s who just received a letter from the bank that holds a $250K equity line. It was frozen because it is based on equity in his million dollar home to 90% LTV. Their reason for freezing his credit line? He lives in a declining market nearly everyone does these days, therefore they cannot afford the risk of allowing him to utilize this credit line. That decision terminated his ability to fix and flip houses, which he does rather nicely. It probably reduced his income by $150K per year. It will no longer buy another $75K in purchases at Home Depot, lumber yards, appliance stores, etc. It just took another five or six extra - sharp homes off the market for buyer will have to settle for less. How many thousands of others like him have lost their contribution to the economy?. b If someone in the top 1% of all borrowers can not get his hands on credit, how likely is some poor klutz with mediocre or worse credit? The truth is that they do not stand a chance! / b

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are debt consolidation loans good or bad

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