What Are The Cons Of a Debt Consolidation Loan?

Effective management of debts is a goal for many who wish to achieve financial freedom. The reality is that handling outstanding finances and accumulating credit can prove difficult leaving more people feeling at a loss. While debt consolidation loans may seem like a suitable solution, it is important to take a closer look at the cons of such alternatives before a final decision is made.

Debt consolidation is a process that makes it easier to manage and afford outstanding credit. The desirable feature lies in the fact that you will no longer be responsible for the payment of multiple small debts and bills, but will be able to cover a single installment. The loan is made available so that you may settle monthly expenses and instead pay for the borrowed sum.

It is important to remember that every account run up will charge a significant amount of interest. Many financial institutions offer loans that assist in settling the debts preventing the rise in charges. One will be responsible for covering the monthly payment of the loan and the associated interest.

While it all sounds like a beneficial choice for your finances, there are many details that consumers fail to assess that could contribute to additional problems if you cannot meet the terms of the agreement. The first limitation is that you are going to be responsible for a large repayment that is often associated with a high interest rate. Where you are unable to pay back these loans in a timely manner, it could result in the forfeiture of assets.

If you are not careful when it comes to managing expenses, you could end up adding additional, smaller debts to the repayment plan. It is very easy to grab your credit card to cover costs when it has been cleared of its limits. If you are considering consolidation, you will need to exercise discipline in handling finances to prevent increasing debts.

While this option is available to those with poor credit, carefully assess the amount of interest that will be charged along with monthly repayments. You could end up paying more on these loans in comparison to your outstanding debts. Consumers may also end up making payments over a longer period of time than it would take to settle bills.

When managing finances, the debt consolidation loans may not prove best for individual financial portfolios. Taking the time to assess the options available and consulting with a financial advisor can assist in making an informed decision. Always look at the risks involved when considering debt solutions.

How to Finance Home Renovations

Renovations can have a significant impact on the value of your home. Moreover, with home improvements you can also enhance the energy efficiency of your home making your home more environmentally friendly while giving you access to a range of provincial and federal rebates. Nevertheless, these enhancements can also be very expensive so you may not know how to finance your home renovations. Fortunately, there are multiple options available to you.


Credit cards are the most common form of financing available to homeowners. While paying for renovations with credit means that you can pay off as much or little of the principle every month, they often carry hefty interest rates. Credit cards are also convenient with respect to buying supplies for your home renovation; but many people prefer not to rely on credit to finance major expenses like renovations.


Bank loans are straightforward and offer better interest rates than credit cards. Repayments are fixed and you can often negotiate a monthly payment that will not stress your budget too much. However, your bank will likely need some kind of collateral before you will be approved. If you have equity in your home, you should easily get approved for a loan. In fact, home equity loans often have the lowest interest rates, making them the ideal solution for financing home renovations.

Personal Line of Credit

A line of credit is somewhat of a cross between credit card financing and loan financing. Personal lines of credit will often have higher interest rates than loans, but lower rates than credit cards. Repayment schedules are also more flexible for lines of credit than bank loans, so this type of financing is often ideal if you’re not sure how much you can pay off each month. With a line of credit you can simply pay your minimum or even the entire balance depending on your financial situation that month.


Refinancing your mortgage is another option available for home renovation financing. Your payments will be spread out over the duration of your mortgage, and interest rates tend to be more reasonable. However, your access to finances will be dependent on the assessed value of your home, and you may incur legal and appraisal fees as well. Re-financing is more appropriate for large scale renovations; whereas credit cards, bank loans, and lines of credit are more suitable for more minor renovations.

Whatever financing option you choose, it is important to carefully consider your monthly budget before going forward with renovations. Especially if you plan to remortgage your home or use your home as collateral against alone, you open yourself up to the risk of losing your home if your income is diminished for any reason. Regardless, with careful planning and consideration, there are many appropriate and manageable financing options available to home owners.

How to Finance Your Swimming Pool

A swimming pool is a luxury that many homeowners dream of, but may not know how to begin the process of financing. As with any home improvement project, money is a big factor when installing a pool in your backyard. A pool is a major home improvement that can cost tens of thousands of dollars to complete. That said, a swimming pool is well worth the money because it will provide you and your family with entertainment for years to come – not to mention the increased value to your home when you choose to sell. So, how do you go about financing a pool?

Most homeowners can’t afford to pay for a swimming pool up front, and need to take out a loan for their pool. Many homeowners choose to take out a home equity loan or a second mortgage to finance their swimming pool. These types of loans offer low interest rates, and borrowers can typically receive higher loan amounts than with other types of loans. In today’s housing market, however, it can be very difficult to qualify for a second mortgage or a home equity loan unless you have an immaculate credit rating. In addition, it can take 4-6 weeks more just to receive funding after approval.

An unsecured pool loan is another option that is often the best choice for homeowners when financing a swimming pool. An unsecured loan is one that is not backed by a lien or security interest in your personal property. Most unsecured pool loans have decent rates, zero closing costs, and no penalty for prepayment, but typically only offer up to $30,000 in funding. It usually only takes between 3-7 days to process the loan and receive funding. An unsecured loan typically has a term of anywhere between 3 and 15 years – so you can enjoy your pool while you are paying for it!

No matter which type of loan you choose to finance your swimming pool, you should make sure you hire a reputable pool builder to handle the project. When considering estimates, remember that shopping by price is never the best solution. As the saying goes, “If you think hiring a professional is expensive, wait until you hire an amateur.” As with everything else in life, if a deal seems too good to be true, it probably is. Instead, search for a reputable pool builder with a long history of customer satisfaction.