Home Improvement Debt Consolidation
If you are tired of your debts and want to get rid of them as quickly as possible, then you may consider home improvement debt consolidation loan. This is a way out for those individuals who have taken a lot of loans to refurbish their homes, but are finding it difficult to pay them off. No doubt that home improvement or renovating the house can turn out to be expensive today. There are several reasons for that. Nowadays during the period of world financial crisis appliances do not come cheap and nor does labor. So most of us prefer applying for home improvement debts to renovate our houses.
But when we do manage to cover one of the expenses involved, we realize there are many other things that we need to buy for our homes. And we take another home improvement loan. But the situation with the loan is usually quite tricky. All of these loans seem very attractive in the beginning. They certainly are an easy finance option. But as the time pass we realize that we spend a huge amount of money in paying the interests for these loans.
In this case a home improvement debt consolidation loan can help. A home improvement debt consolidation loan is a loan that you can take to consolidate your debts that you incurred to renovate your home, and pay them off.
There are several pros of choosing a home improvement debt consolidation loan. First of all, the interest rate that you would pay from the consolidation loan will be much lower than the interest rate that you paid for your home improvement debts. Eventually you will save a considerable sum of money on the interest rate itself.
Secondly, you could avail of a longer repayment period. You’ll get an opportunity to make smaller monthly payments, because the repayment period of the consolidation loan is higher. As the result, all your home improvement debts will be paid off fairly quickly.
It’s very important to underline that in case of home improvement debt consolidation you need to be careful about choosing the right loan option. Remember that if your repayment period is very long, you might end up paying a whole lot of money as the interest! You should compare that various options that are available to you in the market and only then make your choice of the right kind of consolidation loan.
Besides you should read the terms and conditions carefully before you decide upon a particular home improvement debt consolidation loan. You can also ask your debt consolidation lender to negotiate with your home improvement debt lenders about the amount of money that you would be expected to repay. You can save a lot of money this way, considering the fact that you will be making all your payments beforehand.
Home Improvement Debt - Q&A
Q: Can you claim home improvements on taxes?
A: According to the Internal Revenue Service (IRS), a home improvement is a project that adds additional value to your home, such as a new pool, new windows or even an add-on room.
Loan Interest - If you take out a loan to pay for home improvements, the interest on the first $500,000 is tax deductible. If you are married and file a joint return, the interest on the first $1 million is deductible.
Medical Purposes - If the purpose of the home improvement is for medical reasons, you can include the costs as a medical expense on your taxes. Medical expenses that exceed 7.5 percent of your adjusted gross income can be deducted.
Selling Your Home - When you sell your home, the gains taxes you pay depend on the increase in the value of the home. When you pay for home improvements, you increase your tax basis in the home so your taxable gain on the sale of the home is lower.
Energy Saving Tax Credits - If you install energy-efficient items like doors, windows and heaters, you can claim a tax credit of 30 percent of the cost of purchasing and installing the items, up to $1,500.
- Debt Reduction Strategy
First of all you should create a sound budget. And you'll see how much you spend on things you need and don't need. Make sure you have your priorities listed by jotting down your monthly income and expenses. With the help of the budget you'll have a full picture on how much money go to your debt repayments and savings. Debt consolidations can be an effective tool to reduce and wipe off credit away for good. You should consolidate your loans into one and get a lower monthly interest rate. In addition, you can do balance transfers and combine them all in a single credit card.
- Consumer Debt Solutions
One more interesting ways of debt relief, which seems ti be the easiest one is Ostrich Method. Here, you just refuse to pay off bills, ignoring debt as like it will vanish. However, it is not advisable to ignore debts because your credit will be ruined if you don't pay. Using this method, you should choose the qualified company which will help you to negotiate with your creditors and reduce your outstanding debt/bills by 40-60%. You'll have to pay a fixed amount each month to your settlement company. The payments accumulate into lump sum cash after months. The lump sum cash is then paid off to your creditors.
- Debt Bailout
Credit companies have put some conditions and checks in place to ensure that people do not abuse this system. You should have missed at least 3-4 payments. If you miss several payments then the banks will start noticing you and start thinking that they might lose all the money you owe them if it is not reduced to a manageable level. If both of these criteria apply to you then you are eligible for a consumer debt bailout. If you want to get a debt bailout, you’ll need to fulfill some criteria.