Bad debt can really harm your credit historyWritten by Jakob Jelling
While most people use phrase "bad debt" to refer to a lot of debt, or just owing a lot of money, this phrase actually has a very specific use when it comes to financial issues. Bad debt in this case is a debt that cannot be collected. This usually happens when person who owes money goes bankrupt, and does not have ability to pay toward debt.If you are a creditor and person who owes you money declares bankruptcy, this bad debt can be a problem. After all, even though a good deal of remaining estate will be separated out to many different creditors, you will probably not get all of money that you are owed. For this reason, most creditors try to work with debtor in order to make it possible to pay back debt - that way, they'll get all of money back, instead of just a little. If you owe money and you do not believe that you can pay it, it might sound like a good idea to have that debt declared as a bad debt. However, this is not case, as declaring bankruptcy can have lasting effects on your financial situation, whereas being in debt and working to pay off your debts can actually be beneficial in long run.
| | Cash Out Refinance – Home Equity Mortgage Loan or Cash Out RefinanceWritten by Carrie Reeder
There are some definite benefits to doing a cash out refinance. Just make sure that overall you are not going to be spending more money in fees and interest doing a cash out refinance as opposed to a home equity loan. When you do a cash out refinance, you are refinancing your entire loan. Let's say you owe $300,000 on your home and you want to get $10,000 in cash out. If in refinancing your rate will be same or higher, then you will be losing an extraordinary amount of money in fees just to get a $10,000 loan. In a case like that, you would definitely want to go with a home equity loan.Home equity loans are better if: 1. You have a large home loan yet only need to cash out of a small amount of equity 2. You need to borrow up to 100% of equity in your home 3. You want a revolving credit line 4. You want a payoff sooner, or longer than term of rest of your mortgage loan On other hand if you are: 1. Going to refinance anyway 2. Wanting to borrow a large percentage of your home’s equity 3. Refinancing for a much lower rate
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