More and More people are turning to second mortgage home equity loans, often called debt consolidation loans, to pay off higher interest unsecured loans. The number of people that have amassed huge amounts of credit card debt is staggering. People will be paying off their credit cards for 30 to 40 years, even if they never use them again. The minimum payments on all their cards together makes it so they can’t afford to pay their normal living expenses. Credit card companies are having a hard time collecting the money that is owed to them.
If you are a home owner, you may be able to take out a loan on the amount of equity you have accrued. You can then take this money and pay off your unsecured loans with the highest interest. The debt consolidation loan will have a much lower interest rate than the other loans and your payments will be much smaller. Once you have been approved for your loan, call your creditors and see if they would be willing to take a lesser amount if you could give them one lump sum.
If, after using the money from your debt consolidation loan, you still have more unsecured debt, try talking to your creditors. Ask them if they will extend the terms on the loan, lower your payments, lower the interest rate, or even take off any late fees or accrued interest. You may be surprised to find out just how many different ways they are willing to help you. Most creditors would rather work with you to find a solution you can both be happy with, than not be able to get any money at all.
Once you have talked with your creditors, if you still find yourself in the situation where you just can not make it, try looking for a credit counseling company. Sometimes creditors will do even more with a third party, knowing that you are working towards taking care of the problem, and the third party will be responsible for making the payments.
The important thing is to try and take care of your situation in some way. Avoiding phone calls, throwing away mail, and deleting emails is not going to make the problem go away, and it will only make your creditors try harder. Debt consolidation is a good place to start. Getting out of debt is not going to be easy, and certainly not as much fun as what you did to get there in the first place, but once you get started, you will sleep better.
