Dangers of Home Equity Debt Consolidation Loans

There are so many debt relief companies out there all vying for your hard-earned dollars. You need to know a little something about the ones that you select before you sign on the dotted line. The dangers of a home-equity debt consolidation loan starts off with the very nature of this form of collateral debt. Make no doubt about it you are incurring another line of credit when you take out a debt consolidation loan even though the salesman made it sound as if your past credit card and debt problems were just that, in the past.

Voluntary Theft and Abandonment

What is surprising about individuals and homeowners, who readily put their homes up as pieces of collateral against a debt consolidation loan, is that they do this action in the very first place. Right after that, it is not surprising that many professional financial experts consider debt consolidation home equity loans as one of the most dangerous loan issues that exist today in the marketplace.

Very Frightening Numbers

The reason why these debt loan professionals feel that home equity loans are nothing but stress and danger comes from the fact of the record of default of this form of loan industry. With the defaulted loan percentages hovering around the 15 to 20% mark, in reality, this means that out of 100 homeowners who took out a debt consolidation loan and used their home as collateral, 15 to 20 of those defaulted and lost their home.

Surprisingly Inept

The dangers of a consolidation loan with the residence as collateral is the very fact that you can lose your home if you default on any of the loan terms. What is more distressing is that many of these debt loan contracts come with teaser rates for the first six months of the loan repayment schedule. One can just imagine the shock to the bottom line when individuals who reach that six-month teaser rate, did not realize this little fact and are then slapped with a double-digit variable rate that rises each year.

At All Costs

Please be careful and avoid at all costs signing-on to a home equity debt consolidation loans experience since the result may be something out of your darkest nightmares. You do not have to put your home, the place in which you may have been in for decades, as collateral for any debt consolidation loan instrument. There are multiple options and methods, into which you can apply and be accepted, without having to put up the house and home.

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