Digital News Report – Low interest rates and looser lending standards are making it easier for Americans to qualify for personal debt consolidation loans and mortgages. Since the recession started, tight lending standards and tight credit has put many Americans in a financial bind. This may be changing.
Banks are easing standards and terms according to the most recent report from the Federal Reserve. This easing includes both household and business loans.
Some banks are recommending consumers consolidate their debt into one easy payment. The goal is to save money and lower the monthly payments.
There are several types of debt consolidation loans. Secured loans will carry a lower interest rate but require more paperwork. Unsecured personal debt consolidation loans can be more difficult to get, but they are still available.
Chase Bank offers personal debt consolidation loans. If the borrower had outstanding loans, including car loans and credit card debt of around $12,000, the bank could save customers $1,981 over a 24-month period. This debt includes credit cards at 19%.
The interest rates and payments will depend on the borrowers credit score. Customers with a poor or bad credit score will pay more and there may be less saved.
The bank says that rates on home equity loans and lines can be lower than credit card rates by 7-10%. Some credit cards charge extremely high rates and the savings could be more. Check with your tax professional to see if you can save money on your taxes. Interest paid on a home loan may be deductible.
By Tina Brown