Debt Consolidation Solutions
Horizon Bank has several solutions available offering individuals the opportunity to consolidate their debt, simplify their monthly bill paying, and, in most cases, save them money.
According to Jill Sandilla, VP Consumer Loan Manager, “Individuals with excessive revolving debt often have trouble making their monthly payments. In the case where they are only paying the minimum due each month, the total interest and the time necessary to pay off the debt will be an uphill battle. What normally would take two years to pay off can more than double in time while the interest associated with the unpaid debt continues to escalate.”
Our staff may suggest a number of loan options to help our customers alleviate their debt problems. One option is a Home Equity Loan, also referred to as an “equity loan” or “second mortgage.” A Home Equity Loan – based on the difference between the homeowner’s equity and the home’s current market value – is a fixed loan amount available to help pay off your bills completely or, at least, pay off as much as possible. Most Home Equity Loans feature a fixed interest rate, which is typically substantially less than what you are currently paying on your credit cards, unsecured loans and or other finance company debts.
Another option is a Home Equity Line of Credit – a form of revolving credit in which your home serves as collateral. Although the line of credit is not often used for debt consolidation purposes, there are some occasions where it would make sense. A discussion with an underwriter can help determine which product makes sense. Normally, this product is best suited for long-term flexibility of borrowing and repayment.
In most cases, the interest that you are paying on your Home Equity Loan or your Home Equity Line of Credit may be fully tax deductible. Check with your tax consultant to see how Home Equity Loan interest affects your return.
In the case where a homeowner does not have enough equity in their home, which may be caused by several factors such as a decrease in market value of their home or a first mortgage that is already at a high loan to value, our financial advisors may still be able to help with a debt consolidation solution. One option is a secured loan – a loan in which funds in a checking account, certificate of deposit, or savings account is held for collateral. Refinancing a vehicle owned free and clear would be a second option while another option could be to consider an unsecured loan which may be possible depending on the amount of debt needing to be consolidated.
Sandilla said, “It all depends on each person’s specific situation. Loan originators and underwriters should explore every available option and determine what is right and what is possible to help our customers get back on their feet financially. We want consumers to know that there are solutions to help alleviate the burden of carrying too much debt, and talking with a Horizon Bank advisor is the first step to enjoying a debt-free situation.“
Apply online or for more information on a Home Equity Loan, Line of Credit, or other debt consolidation products, visit a Horizon Bank branch near you, or call toll-free at (888) 873-2640 during normal business hours.