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Beware Of Debt Consolidation Loan Scams
_FACTS About Credit Counseling and Debt Consolidation...
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Are you in a financial mess and finding it difficult, if not impossible, to reverse your fortunes?
At the rate that you are going you may find yourself filing for bankruptcy and watching your credit standing ruined.
Before you sign on for a debt consolidation loan to help you buy some time, look it over carefully to learn what you are getting into. Not all debt consolidation loans are the same and some are downright harmful and can lead you into deeper trouble.
Robert and Jane are like any typical young married couple: they both recently turned 30 and after the birth of their second child Jane decided to stay at home to raise their children. Gone was the expense of day care, clothing, and a second car. Instead, Robert and Jane actually saved money by not having Jane go to her library assistant job at the local elementary school.
The problem facing the young couple can be traced back to their variable rate mortgage.
When they purchased their 3 bedroom ranch in 2002, they were able to get a low variable rate mortgage of 3.125% for the first three years. Once November 2005 rolled around the variable rate would change and change it did. The new rate of 6.25% is still low but it is exactly double their current rate. Paying $380 more per month on top of more for fuel and utilities has taken its toll.
Beginning in January the couple started to be late on a Visa payment and by April the couple defaulted on a student loan. Today, the couple is finding it hard to keep up with car payments, but it is their mortgage that is a real worry to them. They simply cannot refinance at this time.
Enter the debt consolidation loan arena. Yes, the young couple has an offer to combine a student loan, the car payment and two credit card bills and save themselves $207 per month just enough to stay ahead of the game.
Unfortunately, the offer comes with a $250 application fee and the loan is secured against their home's value.
Worse, the loan's term is stretched out for 15 years, a full 5 years longer than their longest current loan, the student loan.
Is this debt consolidation loan a scam?
It is if you don't read the fine print. As with any debt consolidation loan, check out all of your requirements and learn what you will owe in the end.
Ultimately, if something goes wrong you'll pay the price. Possibly in the form of a repossessed home if you are not careful.
Are you in a financial mess and finding it difficult, if not impossible, to reverse your fortunes?
At the rate that you are going you may find yourself filing for bankruptcy and watching your credit standing ruined.
Before you sign on for a debt consolidation loan to help you buy some time, look it over carefully to learn what you are getting into. Not all debt consolidation loans are the same and some are downright harmful and can lead you into deeper trouble.
Robert and Jane are like any typical young married couple: they both recently turned 30 and after the birth of their second child Jane decided to stay at home to raise their children. Gone was the expense of day care, clothing, and a second car. Instead, Robert and Jane actually saved money by not having Jane go to her library assistant job at the local elementary school.
The problem facing the young couple can be traced back to their variable rate mortgage.
When they purchased their 3 bedroom ranch in 2002, they were able to get a low variable rate mortgage of 3.125% for the first three years. Once November 2005 rolled around the variable rate would change and change it did. The new rate of 6.25% is still low but it is exactly double their current rate. Paying $380 more per month on top of more for fuel and utilities has taken its toll.
Beginning in January the couple started to be late on a Visa payment and by April the couple defaulted on a student loan. Today, the couple is finding it hard to keep up with car payments, but it is their mortgage that is a real worry to them. They simply cannot refinance at this time.
Enter the debt consolidation loan arena. Yes, the young couple has an offer to combine a student loan, the car payment and two credit card bills and save themselves $207 per month just enough to stay ahead of the game.
Unfortunately, the offer comes with a $250 application fee and the loan is secured against their home's value.
Worse, the loan's term is stretched out for 15 years, a full 5 years longer than their longest current loan, the student loan.
Is this debt consolidation loan a scam?
It is if you don't read the fine print. As with any debt consolidation loan, check out all of your requirements and learn what you will owe in the end.
Ultimately, if something goes wrong you'll pay the price. Possibly in the form of a repossessed home if you are not careful.