Declining Interest Rates an Opportunity for Debt Consolidation

Now is the time to consider doing all of those things that you have been putting off until rates dropped. It is time to consolidate loans or look into refinancing. Home equity loan rates look fantastic as well.

With the rapid drop in the prime rate you will notice that many of the rates you are paying have decreased. Credit card rates are often tied to prime and have therefore probably decreased.

Home equity loan rates, like so many other secured loans, are also tied to prime. In almost every case these loans and lines will have a smaller spread above prime, which means that the rate on these has become very attractive.

This presents a fantastic opportunity to consolidate loans. Imagine turning the amount that you owe on that Disney credit card into an equity loan and taking advantage of those home equity loan rates for all of your debt.

Taking out a equity loan, like refinancing, involves the value of your home. If your home has sufficient value to allow you to take advantage of these home equity loan rates or to allow a mortgage refinance this is the perfect opportunity to consolidate loans and credit cards.

Secured loans have their drawbacks as well; if you are unable to repay the loan or line you place your collateral at risk. In this case, your home may be required of you.

Despite the risk, used wisely and in conjunction with a sound financial plan, home equity loans can save you money. In addition, the interest may be tax deductible, saving you money on your taxes.

In this market of dropping rates your investments may be suffering, but while it may not be the time to invest it is the time to borrow. Home equity loan rates are very attractive, making secured loans excellent vehicles with which to consolidate loans.

Even if refinancing is an option, mortgage rates do not follow prime. As prime continues to fall, and the Federal Reserve has made statements saying that it will, equity lines may have better terms than first mortgages.

Take advantage of this opportunity for debt consolidation, now is the perfect time for refinancing and reducing your monthly debt payments.