The global crisis has turned to a financial crisis for most households. Every day people struggle to keep up with their monthly bills. In addition, what if most of those bills are consumer debt? The burden that they have to handle is almost impossible. Fortunately there is a possible solution for debt elimination – the no equity debt consolidation loan. This is a way that helps people to overcome the crisis and to survive. This kind of loan is also called 125 second mortgage loan which allows the homeowner to take out a loan that is 125 percent more than their house value.
If you want to make an improvement or renovate your house, this loan is appropriate for you. If you have temporary problems with paying the bills or you need special cash for medical service or surgery, you can take the no equity loan. It is obvious from the name of the loan that it can be used to consolidate debt too. This loan can be applied for even if you don’t have equity in your home. In this case the debt is granted by other requisites such as earnings. In addition, tt is an advantage if you have a good credit history which is indicative for your reliability to the lender.
125 second mortgage has a lot of advantages. The biggest of all is the opportunity that it gives the borrower the ability to obtain more money than the equity of the house. The tax advantage, the low interest rate, low monthly payment is the other advantages. You can ask where the trick is. There is no trick. You just have to pay a small sum each month.
As everything in the world this loan also has disadvantages. The whole risk in this type of credit is for the lender because it is not secured with collateral. As the risk is bigger the interest rate is proportionally higher than other equity loans. The fact – value of the property determined the conditions of the loan. If it declines you will have to pay higher interest. The last disadvantage is that you cannot sell your home.
You have to be very careful while taking a decision for the no equity debt consolidation loan. All you have to do is to assess your budget and chances to pay and to think about the consequences if the interest rate increases. You should check the credibility of the financial institution you have already chosen.