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What is Debt Consolidation?

Quick Tips

  1. 1Consider a Home Refinance or Home Equity loan if you own a home and you’ve built-up a lot of equity.
  2. If you don’t own a home or if you’re still working on building equity, consider a personal loan or a low interest rate credit card.
  3. If your credit score is low and you’d like help with your debt, a Debt Management Program could be right for you.

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Debt consolidation combines several loans or debts — usually credit card debt — into one low payment. This can lead to lower interest rates and lower monthly payments.

A debt consolidation loan can cut those numerous high-interest debts down to size into one low-interest loan. How do you qualify for a debt consolidation loan? Do you have to own a home? We’ll clear this up for you.

Did you know?

Managing your debt is not as difficult as you may think. A lifestyle change may be in order, but don’t sweat it. The long-term payoff is worth it. Don’t wait any longer. Start reducing your debt today.

Manage Your Debt

Managing your debt is not as difficult as you may think. A lifestyle change may be in order, but don’t sweat it. The long-term payoff is worth it.

It takes getting used to, but as you move closer to life without debt, you’ll settle in and be able to move forward with your life.

Try Our Debt Consolidation Calculator

Should you consolidate your debt? Use this calculator and find a plan that fits your needs

We’ve laid out several important steps for eliminating debt. Take a look and get started today.

Click here to learn more about managing debt.

Combine your debt and save

Combining several high-interest loans into one low, manageable payment can free up your cash. With the extra money you’ll have, feel free to pay more against the principal (and pay off debts earlier), or use the extra cash wisely in other areas where needed.

Start reducing your debt today. The more you wait, the more cash you stand to lose. You have plenty of options. Are you a homeowner? Let’s start there.

Homeowners

First off, congratulations on owning a home. Now, let’s start reducing your debt and getting rid of those high interest rates.

As a homeowner, there are several different options available to you. Let’s explore the strengths of each one, and match a debt consolidation loan to your individual needs.

Cash Out Refinance

Built up a lot of equity? What about your mortgage interest rate? Is it near or higher than today’s cash-out refinance rates? If so, you’ll want to consider a Cash-Out Refinance.

A Cash-out Refinance:

  • Allows you to finance the loan at a lower interest rate than a home equity loan
  • Use funds for debt consolidation, home remodeling, college tuition, etc.
  • Provides additional funds you need to consolidate your other higher-interest debts

Home Equity Loans

A home equity loan, also known as a second mortgage, allows homeowners to borrow money from their home’s available equity.

Home equity loans are commonly used for debt consolidation. They’re a popular financing option for homeowners who need additional cash. These loans usually offer a lower interest rate than credit cards. Plus, the interest you pay may be tax deductible (consult a tax advisor).

Click here to compare home loan rates and see how much you can save.

Reverse Mortgages

A reverse mortgage is a home loan designed by the federal government that allows homeowners 62 years of age or older to borrow money against the equity in their homes. But unlike a traditional mortgage, no mortgage payment is required as long as the borrower(s) live in the home as their primary residence.

Reverse mortgages are a popular financing option for seniors that own their home, have built up equity, and want additional cash without the burden of a monthly mortgage payment. Stay in your home and enjoy the financial independence that a reverse mortgage can provide.

  • Eliminate your existing mortgage
  • Turn a portion of your equity into cash
  • Receive your funds as a lump sum, monthly payout, or line of credit
  • Funds received from a reverse mortgage are tax-free (consult a tax advisor)
  • Never make a payment as long as you live in the home
  • You’ll never owe more than the home is worth
  • No income or credit requirements
  • Retain title ownership of your home

Click here to explore reverse mortgages

For Non-Homeowners

The time to buy is now, but you can still reduce your debt if you don’t currently own a home. Here are your options:

Personal Loans

A personal loan could help you consolidate your debt into one low monthly payment and save.

Click here to learn more about personal loan options.

Credit Cards

If you have good credit, consider transferring your total debt to a low interest rate card.

Click here to explore credit card options.

Debt Management Programs

Debt Management Programs combine multiple unsecured debts into a single monthly payment that is often much lower than what you’re paying now. If you need help with your debt, visit our partner Consolidated Credit Counseling Services today.

All deposit products offered through E-LOAN, Inc. (E-LOAN) will be opened through Banco Popular North America (BPNA), a New York state chartered bank insured by the FDIC that is the direct parent company of E-LOAN (i.e. E-LOAN is a wholly-owned subsidiary of BPNA). Processing services are provided by BPNA. All deposits with BPNA are insured for the maximum amount allowed by law, and all balances on deposit with BPNA (whether directly or through E-LOAN) would be combined for purposes of determining FDIC coverage eligibility. Beginning January 1, 2013, all of a depositor's accounts at an insured depository institution, including all noninterest-bearing transaction accounts, will be insured by the FDIC up to the standard maximum deposit insurance amount ($250,000), for each deposit insurance ownership category. For more information about FDIC insurance coverage of noninterest-bearing transaction accounts, visit ww.fdic.gov/deposit/deposits/unlimited/expiration.html.