123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL » Business >> View Article

What Are Traps When Consolidating Or Refinancing?

By Expert Author: alden darvin

With a view to make their debts more manageable for people, some financial institutions promote consolidation of debts and refinancing loan options. However, if an individual is in a tough financial situation it would be wise to think of several times before selecting these options. This is because there are chances that they will be forced to pay more under the modified arrangement as compared to what they would have paid originally. Refinancing is nothing, but cancellation of your present loan agreement and getting into a new one with the same old lender or a new lender. Debt consolidation involves getting a new loan for paying out the other loans that are to be paid off.

Before getting into the details about what are traps when consolidating or refinancing, it would be wise to understand the merits and demerits and they are discussed Merits:

Generally, people go for this option with a view to reduce the monthly payments to be made, to manage a single payment as against several payments and finally to save money when the costs and interest are lower as compared to those of an old loan arrangement.

Demerits: Even though, consolidation or refinancing might seem to be a good option for short-term basis, the borrowers will have to pay exit fee for getting out of the current loans at an early stage. Furthermore, the charges and fee for setting up and maintenance of a new loan is likely to be expensive as compared the borrower would have been kept the current loan/s. Now, let us get into the details about what are traps when consolidating or refinancing:

In case you are considering consolidating and refinancing as your option, it would be wise to seek expert advice in this respect. There are chances that some unscrupulous lenders provide loans on unfair terms, particularly when they get to know that an individual has monetary issues.

In addition, there are chances that they will charge a higher rate of interest as the individual seeking their help is a high risk individual with financial difficulties. The borrower will end up with a worse financial position, particularly if his house his house is pledged for consolidated or new loan.

There are some lenders, who offer refinancing with terms stating as ‘interest only’ for a period of one or two years. Under this arrangement the borrower will have an equivalent level of debt at the end of the loan even though, he has made all the needed payments.

This content has been taken from http://goarticles.com/article/What-Are-Traps-When-Consolidating-Or-Refinancing/7786393/

Are you looking for mortgage lenders california, then ILoanCA is the best place to find most suitable mortgage loan refinancing. We provide home refinancing loans, fha loans, jumbo loans with lowest interest rates. To explore more , please Click Here.

Total Views : 66Word Count Appx. : 457See All articles From Author

Business Articles

1. Communicate Anywhere And With Anyone Using A Best Satellite Phone
Author: Tim Austin

2. The Importance Of Safety Handrails
Author: Duraslide Pte Ltd

3. Air Conditioning Repair Los Angeles – Basic Points To Focus On
Author: coryfrank

4. A Regular Eye Exam Is The Key To A Healthy Eyes
Author: Cory Frank

5. Finding A Suitable Moving Company For Your Move
Author: Cory Frank

6. The Wl-250 Tower
Author: Leslie WaterWorks® offers the largest array of bottleless purification and filtration water coolers

7. Properties In Noida
Author: Sanjay Sirohi

8. Find Bgc Condo For Sale With Ease Through This Tips
Author: rokyfernandis12

9. Find Condo For Sale The Easier Way
Author: rokyfernandis12

10. Things To Bear In Mind While Searching For Condo For Sale Fort Bonifacio
Author: rokyfernandis12

11. Fort Bonifacio Condo For Sale At Budget Friendly Rate
Author: rokyfernandis12

12. The Benefits Of Using Iridium Satellite Phones During Emergencies
Author: Tom Austin

13. Find Right Condo For Sale Fort Bonifacio With Ease With This Guide
Author: rokyfernandis12

14. How To Make Life Easier With Edinburgh Taxi Tours
Author: Gordon Gill

15. Signage Melbourne, Australia Offers Affordable Services To Promote Your Brand Through Signage Advert
Author: jackricklomas

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: