Hiding from your mailbox because of the piles of bills that keep showing up? Hate looking at your phone because of the collection agencies that keep calling? Mounting debt is more than a financial problem: It can wear on you emotionally. It’s worth the effort to take control of your financial future, and debt consolidation is a great option. Today, there are many online options that compete against the more traditional methods. Let’s compare the two.
Easier to Compare
One of the most popular methods of debt consolidation is through cash-out refinance. This is a method where you apply for a new loan on your home that offers cash for the equity in your home. You’ll be able to pay off high-interest credit cards or other debt immediately, and then pay the monthly fee toward your new mortgage. Online loans vary from traditional loans dramatically when it comes to comparisons. Online loans offer the ability to browse many different loans, creating apple-to-apple looks at what different lenders have to offer. With traditional loans, borrowers often are dealing with a single bank or a single broker who, by nature of the business, discourage shopping around.
Another kind of debt consolidation is a home equity loan, which differs from a cash-out refi in that it is a second mortgage on your house. You’ll still be paying off your first loan, so those terms won’t change. But you’ll be able to effectively liquidate the value that you’ve built up in the investment of your home. When applying for any kind of loan, of course, you’ll need to gather your personal financial records and other paperwork that is needed. It is must easier to shop and apply for debt consolidation online, because you only need to get the information together once in a folder on your computer. There is no need to worry about losing crucial documents when you go from bank to bank, like you may do with a traditional loan
Finally, because online debt consolidation offers the ability to shop around, you are more likely to find a process that is less expensive than a traditional loan. However, you need to pay close attention to terms, rates, and fees. Be sure you are working with an online lender who is able to answer your questions so you can fully understand the terms of the debt consolidation. Traditional lenders have an advantage in that the dynamic is one where they have the power to lend or not. Online, borrowers have an advantage by being just a click away from a competitor. Make sure your lender prioritizes customer service and fair deals.
If you have questions about debt consolidation, visit Refi.com today.