consumers who choose to take out an equity loan on their house to pay down their debts carries significant risk
Las Vegas, NV (PRWEB) June 07, 2017
Credit card debt is a financial problem a lot of consumer are aware of and National Debt Relief explains the risks when people choose to pay it off with a home equity loan. The article released May 1, 2017 and titled “Why Using a Home Equity Loan to Pay Off Credit Card Debt is Dangerous” points out the potential dangers in using this repayment strategy.
The article starts off by pointing out that consumer debt has been on a steady rise for the last few years. One of the reasons for this is a sluggish economy and historically low interest rates. It does not help also that the cost of living has gone up more rapidly than the income for many consumers. This has led to utilizing credit cards as a means to an end. This usually results to unmanageable credit card debt.
With this, a lot of consumers are thinking of taking out a home equity loan to pay off for their credit card debt. Who wouldn’t want to trade in a high-interest rate for a lower one and save money in the process? Consumers get to consolidate the loan under one account and have an easier time paying it down.
However, the article explains that by consumers who choose to take out an equity loan on their house to pay down their debts carries significant risk. This is because lenders are putting a lien on their property. With this, once they miss payments and default on the loan, consumers can lose their home.
One thing people need to understand and what the article points out is that there is a big chance that a home equity loan can simply be treating the symptom and not the real problem. Once consumers revert back to their old ways and rack up debt after debt, they dig themselves in a deeper financial hole.
When this happens, they can start missing payments or looking for ways to transfer them again to another lender. This can eventually catch up with them and once they default, the lenders can exercise their lien on their property and repossess it. They can then sell it to someone else to recoup their losses for non-payment of their loan.
To read the full article, click https://www.nationaldebtrelief.com/home-equity-loan-credit-card-debt/