Advantages of Debt Consolidation:
Debt consolidation is the process of getting one large loan to pay for all of your outstanding debts. Debt consolidation is beneficial because the interest rate for the consolidation loan may be much lower than the interest rate you are currently paying on your debts. The consolidation loan may also extend the time you have to repay the debt, resulting in a lower monthly obligation. In addition, most borrowers prefer to have just one payment each month, rather than having multiple bills they need to worry about.
Drawbacks of Debt Consolidation:
Some lenders may try exploiting your situation to earn a large profit at your expense. Debt consolidation loans can have high origination fees and other hidden costs. Also, some debt consolidation loans will have a variable interest rate. Variable rates are good when interest rates in the economy are low; however, the rate can rise very quickly, with little notice, and drastically increase your required payment.
Debt consolidation lenders also typically require borrowers to give collateral for the loan. The most common type of collateral in debt consolidation loans is the borrower’s home. In order to use the home as collateral the home must be worth more than the debt consolidation loan and any other mortgage on the property. With the recent drop in home prices, most homeowner’s looking for debt consolidation loans will not have enough equity in the property to qualify for the loan.
Consult a Debt Consolidation Lawyer in the Tampa Bay Area Today
We understand these are very difficult times for you and we are here to help. At Florida Law Advisers, P.A., our professional legal team will work closely with you to develop a comprehensive legal strategy to help alleviate your financial stress. We are experienced in all bankruptcy and debt relief matters and are dedicated to helping our clients regain their financial health.
Our initial consultation is free and we offer flexible payment options to all of our clients. At Florida law Advisers, P.A. we strive to provide you with solutions, not add to your financial burden. We accept many forms of payment and offer our bankruptcy clients the choice of either a low cost flat fee or low cost hourly fee for bankruptcy representation. Contact us today by phone, email, website form, or website chat to schedule your free consultation with a debt relief attorney at Florida Law Advisers, P.A.