How Do You Get a Bill Consolidation Loan?

It is no secret that things are rough out there. Credit markets are seizing up and assets are falling. Unemployment is rising as companies that were once global power-houses now declare bankruptcy. It seems like all of the relief is going to giant companies and failing banks. What about the everyday consumer? What about the little guy? It's not like the bills get easier to pay! Luckily, there's a loan called a bill consolidation loan. A bill consolidation loan might just be the thing to get you out of debt.

What is a bill consolidation loan? A bill consolidation loan is when a lender provides a service where they offer to consolidate and pool together the various monthly bills we all have: phone, electric, mortgage or rent, car payments, credit card payments. The bill consolidation loan then funnels all of these bills to one place - with this lender. The lender sets a certain interest rate and monthly payment - and that's it. All of your monthly bills come together for one Megabill. It takes all of those dozens of bills you accrue each month and turns it into one comprehensive payment. That is a bill consolidation loan.

A bill consolidation loan isn't for everyone, but it might be able to provide some relief for those of us a little behind or looking into credit repair. There are a couple of things to consider when looking for a bill consolidation loan. First, home equity can be a great source for a bill consolidation loan. Your home equity is the difference between its current fair market value and the amount left on your mortgage. This is the equity or debt-free ownership amount on the house. If your home value has increased markedly over the last few years, a bank might recognize that your asset is worth more than what you paid for it and will lend you some of the balance. Obviously, using your home equity for a bill consolidation loan won't work for everyone - if your home has gone done in value - don't do it!

A bill consolidation loan is not a magic pill. It won't solve all of your problems. It is important to consider if you'll get a better interest rate - if you don't have a more favorable interest rate then the bill consolidation loan would be a mistake; you're trying to save money, remember? However, that doesn't mean it can't work for you. Consult your mortgage broker or other financial lender you've worked with before about a bill consolidation loan. Shop around for the best rates. And be smart. Ask for help and you just might find the bill consolidation loan that will lead you to a debt-free life!

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