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Debt Consolidation Loans Aid Northern California Borrowers

By Allison E. Beatty
Local Lender Columnist
Jul 5, 2006
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If you are tired of paying high interest on credit card debt, consider consolidating your debt. There are many debt consolidation loans that will lower your debt and reduce your monthly payments.

Reasons for Debt Consolidation

In essence, debt consolidation loans combine loan balances from several loans into one with a lower interest rate. This eliminates the need to pay several creditors. There are many reasons to consolidate debt in Northern California. Consider this type of loan if you:
  • Are paying 18 percent interest on credit card balances.
  • Have a long-term college loan to pay off.
  • Have outstanding medical bills.
  • Have a car loan at a high interest rate.
  • Want to repair your credit.

Accessing Home Equity

One popular way of consolidating debt is to tap into home equity for a loan. With housing prices appreciating so quickly in Northern California, many borrowers are sitting on sizable equity positions. Here's how to put that equity to work for you:
  • Talk with mortgage lenders about how much you can borrow. Many mortgage lenders let you borrow up to 90 to 100 percent of the equity in your home. A property appraisal is used to determine your equity.
  • Consider typical fees for the appraisal, title insurance and loan processing costs.
  • Shop around with various lenders, as many offer special deals that will waive some fees.
  • Check with your tax advisor, as the interest on the loans may be tax deductible.

Consolidate Debt with an Unsecured Loan

If tapping into your home equity is not an option, then the other route is to take out an unsecured loan. These types of loans have higher rates than a home equity loan, but typically are lower than many Northern California credit cards. In the end, the key is to get the funds you need to help lower your debt and reduce your monthly obligations.

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing columns for 15 years.