Can Debt Consolidation help if I can’t pay my HELOC?
HELOCs are relatively new loans for consumers, and in recent years they have become very popular among people who are looking for a way to pay off their credit cards quickly. By using the equity in a consumer’s home as collateral, banks are able to offer very low interest rates, allowing people to pay off their credit card debt years quicker than they thought they would be able to. Many people have also used these loans to pay for home improvements, college educations, and a variety of other expenses.The problem with these loans only comes up if a person is unable to pay. A job loss, having your hours or salary cut, or even having to pay other bills can mean that a loan that was once affordable is now next to impossible to pay back. Unfortunately, the fact that the loan is tied to your home means that not paying it back can result in losing your house.Understandably, that is reason for a lot of homeowners to panic. As it becomes more difficult to pay your bills, the possibility of losing your home over a few thousand dollars in credit card debt becomes more of a reality. Unfortunately, the bank that holds the HELOC is rarely willing to help, since the potential for profit by foreclosing on the house is so high.There is something that you can do, however. It’s now possible to include a HELOC in a debt consolidation loan. With one of these loans, you’ll be able to convert your secured HELOC into an unsecured debt, often at a comparable interest rate. It’s also possible to include other debts such as credit card and medical payments, often for a much lower interest rate than what you’re currently paying.In order to qualify for a debt consolidation loan, a borrower has to work with a debt counselor. This financial professional will review your finances, income, debts, and other liabilities and work with you to come up with a payment that will fit into your budget. That way, you’ll know that you can afford the payment that comes with your debt consolidation loan.Best of all, your debts will be completely paid off, leaving you with one low monthly payment that you know you can afford. You’ll be able to start fresh on your finances, and get your money back in order.