And the habits that landed you in debt probably haven’t disappeared either.
And too many mistakenly expect debt consolidation to be a panacea for all their ills – when it’s more like putting a plaster on a serious wound. While that is true, it’s also true that there are savvy ways to deal with debt.
“It’s a short-term fix, not a remedy for the underlying problem,” says Paul Slot, the president of the Debt Counsellors’ Association of South Africa. For example, your home loan is usually your cheapest form of credit.
With that size of debt, it’s no surprise that bills can become overwhelming.
Many consumers find themselves spending a significant portion of their income on bills, wishing for ways to lighten their load.
Do you currently own a home and have more than 20% equity in the property?
Do you have credit card or other consumer debt, student loans, or other balances which are charging you high interest rates?You don’t have to be overwhelmed by mounting bills or rising monthly expenses.If you want to get out from under high interest rate charges from credit cards, student loans, or other forms of debt, then a cash-out refinance might be the solution for you.Assuming that a homeowner has built up sufficient equity in their home, he or she may be able to refinance, using their home’s equity to pay off other debts.This will leave the homeowner with one monthly payment, instead of struggling to keep up with several different payments each month.Critics of debt consolidation say it’s a “con” because it dupes you into thinking you’ve done something about your debt.