London, UK (PRWEB) February 16, 2011
With major banks and other lenders cutting back on lines of credit whilst simultaneously raising the fees and interest rates they charge customers, it is getting more difficult to pay off expensive debts and credit card balances. Many consumers are now finding quick solutions, however, thanks to the new range of debt consolidation loan products from http://www.loansconsolidation.org.uk
Debt consolidation loans are specifically designed to let borrowers combine all of their debt and loan obligations together and then pay if off all at once. By effectively consolidating all of their financial obligations into one convenient loan they save themselves from having to keep track of many different kinds of loans. More importantly, they can save money by swapping high-interest loans for a lower priced debt consolidation loan. Once the process has been completed the borrower is left with only one affordable and manageable loan, rather than several expensive and burdensome ones.
One of the most popular debt consolidation techniques involves paying off outstanding credit card balances. Card companies are notorious for cutting back credit limits while raising fees and interest rates, and if a cardholder makes a late payment or accidentally goes over their credit limit they can suffer huge penalties, instant rates hikes, and a lower credit rating. Once the credit rating is lowered that gives card companies an excuse to raise interest rates even higher while further curtailing lines of credit, so it becomes a vicious cycle of increasingly expensive debt. But many new debt consolidation loan products are specifically designed to pay off credit card balances at a lower interest rate, enabling the cardholder to capture savings while eliminating a whole host of credit card problems.
Similarly, many homeowners have taken out home equity loans in order to raise emergency cash or pay for major expenses during the recession. But when homes have second mortgages or home equity loans attached to them, it can make it impossible to refinance the first mortgage because lenders won't allow a remortgage until the home equity loan balances are repaid in full. Without the cash necessary to pay off home equity loans that prevent remortgaging, many homeowners have no way to get out from under their troublesome first mortgages and they lose their homes to repossession. But there is a helpful alternative. Use a debt consolidation loan to pay off the cumbersome second mortgage. With the freedom and flexibility that provides it is then possible to remortgage into a safe fixed-rate mortgage at today's historically low rates.
These kinds of debt consolidation strategies are often recommended by debt counselors and debt advice experts because they can effectively replace several exorbitantly expensive debts - including multiple high-price loans - with one sensible loan that is easier and cheaper to manage. But with traditional banks being less cooperative because their own debt sheets are burdened with bad loans, it is difficult to find good consolidation loans at attractive enough rates.