Consolidating debts pros cons

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Although the lower monthly instalment may give you short term breathing space, it will keep you paying interest for up to twenty years.• It can lead to more debt.Debt consolidation can cause the illusion that debt is being paid off.

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It can also put you under pressure if interest rates rise unexpectedly.• A lower interest rate does not necessarily mean a saving.Like cash-out refinancing, they let you trade home equity for cash, which can be used to consolidate your debts.Home equity loans can carry fixed or variable rates. Home equity terms range between five and 25 years, with the average being 15 years.Consolidate Non-Mortgage Debt in Second - means that you consolidate your existing non-mortgage debt by doing a cash-out refinance on your second mortgage, leaving your first mortgage as it is.The calculator provides two types of information about each of these options.

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