ANSWERS: 1
  • Consolidation loans are used to pay off other loans, but they don't eliminate debt. People can use consolidation loans to roll their debt into one loan with an easier monthly payment. Different lenders have different requirements for approving consolidation loans.

    Private Consolidation

    Private lenders (such as banks and credit unions) offer private consolidation loans, but they require that you pass a credit check. In case of bad credit, you may still get a consolation loan by getting someone to co-sign.

    Federal Consolidation

    There is no need for a credit check or a co-signer for federal consolidation loans, but they can only be used to consolidate other federal loans.

    Mortgage

    A mortgage is a type of consolation loan because you can use it to make payments on credit cards, medical bills or student loans.

    Home Equity Line of Credit

    You can also take out a second mortgage on the valuables inside your house. This is called a home equity line of credit.

    Credit Cards

    A credit card is also a type of consolidation loan because you can use it to make payments on other credit cards. The downside is that the more credit card debt you incur, the lower your credit rating gets, which makes it harder to get new credit cards.

    Source:

    What Are the Different Types of Consolidation Loans?

    Differences in Consolidation Loan Types

Copyright 2017, Wired Ivy, LLC

Answerbag | Terms of Service | Privacy Policy