Financial Freedom Made Simple Blog

Debt Consolidation Articles
 
If you follow the link below you will find a few selected articles on debt consolidation, loans and mortgages.
All of them are top quality, but still simple to understand.
They are written to give normal people like you and me more understanding of something that usually seems a bit complicated.

 

Here is a great explanation from my favorite encyclopedia, Wikipedia:

"Debt consolidation entails taking out one loan to pay off many others."

 

This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

 

Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, which is most commonly a house. In this case a mortgage is secured against the house.

 

The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale (foreclosure) of the asset in order to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.

 

Read all the debt consolidation, loan and mortgage articles here: Debt consolidation articles