| Debt consolidation is a way of increasing your monthly | | | | out a home equity loan for $54,000 you plan to pay |
| cash flow by combining all your high interest payments | | | | off in five years.Receive the lump sum of money and |
| into a low interest and easily manageable home equity | | | | pay off all your creditors.After five years have your |
| loan. The process is explained in the example.Lets look | | | | loan fully paid off only paying $13,500 in interest.YOU |
| at this example:Your credit card loan is $15000 at 18% | | | | JUST SAVED $18,900!How does this work so |
| interestYour car loan is $18,000 at 10% interestYour | | | | well?Home equity loans have extremely low interest |
| student loan $21,000 at 8% interestYou plan on paying | | | | rates, usually around 5%! If you put all your bills into one |
| all these off in five years. Assuming interest rates don't | | | | home equity loan, you will make regular low interest |
| change:You make a monthly payment of principal of | | | | payments on what you owe.This may be considered |
| $250 and $45 in interest on your credit card loan. You | | | | a double edge sword, but because you use your |
| pay $295 a month.You make a monthly payment of | | | | house as the security to finance the loan, if you cannot |
| principal of $300 and $30 in interest on your car loan. | | | | make the payments you may loose your house to the |
| You pay $330 a month.You make a monthly payment | | | | creditor. However, this is a very good incentive to pay |
| of principal of $350 and $28 in interest on your student | | | | your bills!Good debt, Bad debt:It is important to use debt |
| loan. You pay $378 a month.After five years of | | | | consolidation to reduce bad debt instead of good debt. |
| repaying these loans you would have paid $54,000 in | | | | Good debt is defined debt that is owed on the |
| principal and $32,400 in interest.YOUR LENDERS | | | | purchase of an asset. Bad debt is defined as debt that |
| HAVE JUST MADE AN ABSOLUTE KILLING OFF | | | | is owed on the purchase of a liability.Learn how to |
| YOU!Now, lets look at how we can save money | | | | increase your quality of life on with the power of home |
| consolidating your bills using a home equity loan.Take | | | | equity loans. Article by John Whiteside! |