Your One Stop Resource for Saving Money.
Consolidate Bills - Refinance or Personal Loan - The Bills.com Blog
Bills.com Blog > Loans Questions > Consolidate Bills - Refinance or Personal Loan
Consolidate Bills - Refinance or Personal Loan
Wednesday, Apr 4, 2007
Question: I would like to consolidate two bills.. My car and my timeshare.. Would my timeshare fall under a mortgage refinance loan or a personal loan..? I do not own a home .. yet. At the end of the year I will.
Answer: Dear Sonja:I confess, I feel a little stumped by your question. That is because I simply do not know enough about your car and car payment, number of payments remaining and interest rate on the auto loan, your timeshare payments, any equity you may have developed (not likely) in the timeshare. I also have no idea of what your goals are and for what purpose you wish to consolidate only these two debts. Also, your comment about acquiring a home at the end of the year is a bit cryptic. Are you going to purchase a home, meaning applying for credit to do so, or are you expecting a gift or inheritance of a home and real property?
For now, I’ll make general assumptions about the debts and fashion general answers to see if I am anywhere near the mark.
If one of your goals is to create a single debt from these two notes, I do not see an advantageous way to accomplish this. The two forms of collateral are too disparate to act as collateral for a single note. An entirely different set of requirements apply when real estate is used as collateral than when personal property is the collateral.
If you do not use collateral the debt will be unsecured which practically ensures a considerably higher interest rate than either of the two existing notes.
Your timeshare interest is technically real property, and the current note is a real estate note and mortgage. See, FTC advisory Opinion on Timeshares
and Vacation Plans at www.ftc.gov.
However, I doubt that you will find a non-captive real estate finance company to lend money on yours or any timeshare since usually they do not appreciate like normal real estate. On the open market they are treated as personal property in the nature of a lease or contract right. Please peruse the Bills.com Savings Center see if you can refinance the auto loan at an interest rate lower than the current auto note and extend the payments so that your monthly car note decreases by a significant amount.
Refinance the timeshare interest with the original lender if your enquiry shows that you might lower the payments and receive a better interest rate if you refinance. I hope this helps in your particular situation.
If you are interested in learning about how to qualify, generally, for a bill or debt consolidation loan I have detailed a few criteria below:
Typically, there are several considerations when getting a loan - three of the most important are: i) your loan-to-value; ii) your debt-to-income ratio; and iii) your credit rating. Your credit rating is low, placing you in the subprime category, but that doesn't rule out getting a loan that meets your needs.
I will review each one in turn.
1. Loan to value: This
However, I doubt that you will find a non-captive real estate finance company to lend money on yours or any timeshare since usually they do not appreciate like normal real estate. On the open market they are treated as personal property in the nature of a lease or contract right. Please peruse the Bills.com Savings Center see if you can refinance the auto loan at an interest rate lower than the current auto note and extend the payments so that your monthly car note decreases by a significant amount.
Refinance the timeshare interest with the original lender if your enquiry shows that you might lower the payments and receive a better interest rate if you refinance. I hope this helps in your particular situation.
If you are interested in learning about how to qualify, generally, for a bill or debt consolidation loan I have detailed a few criteria below:
Typically, there are several considerations when getting a loan - three of the most important are: i) your loan-to-value; ii) your debt-to-income ratio; and iii) your credit rating. Your credit rating is low, placing you in the subprime category, but that doesn't rule out getting a loan that meets your needs.
I will review each one in turn.
1. Loan to value: This
is calculation looking at how much you want to borrow, relative to the value of the home. It is directly impacted by the amount of money that you can put down on your new home. The larger the down payment, relative to the value of the home, the less risk the lender has to take in extending to you a loan.
2. Debt to Income: This ratio looks at your monthly debt obligations (payments of interest and principal) as a percentage of your monthly income. If you have a significant amount of debt, your debt service burden may be too high for a lender to comfortably give you a loan. You need to either increase your income, or cut your debts.
3. Credit Rating: Your loan, including terms like interest rate and points, will depend on your credit worthiness. One measure of credit quality is a credit score (sometimes a specific 'FICO' score). Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, etc.), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history. If you have a good credit sco
2. Debt to Income: This ratio looks at your monthly debt obligations (payments of interest and principal) as a percentage of your monthly income. If you have a significant amount of debt, your debt service burden may be too high for a lender to comfortably give you a loan. You need to either increase your income, or cut your debts.
3. Credit Rating: Your loan, including terms like interest rate and points, will depend on your credit worthiness. One measure of credit quality is a credit score (sometimes a specific 'FICO' score). Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, etc.), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history. If you have a good credit sco
Also, make sure to get a free financial health check-up with Bills IQ!
User Comments
Submit questions/comments about this post:
Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!
Information provided by Bills.com is for general informational purposes only and is not be
construed as legal, financial, bankruptcy, tax or other professional advice. Should you
require more detailed information or specific professional advice tailored to your situation you
should consult an attorney, financial planner or tax advisor.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
© 2006 - 2009Bills.com LLC. All Rights Reserved.
1. Posted by Melanie Rivers on Tuesday 29th May 2007 14:10
Do you refinance timeshares?
2. Posted by christie on Monday 1st October 2007 13:27
I would like to consolidate some bills on personal loan that I have but my credit score is only 541 and no one will even offer to help what can i do to make my bills into one payment a month please help.
3. Posted by Bill on Monday 1st October 2007 15:29
A possible alternative loan resource you may want to explore is www.Prosper.com a site which puts private lenders in contact with private borrowers. A private lender may be more willing extend you a loan than a traditional bank. If you cannot find a loan that suits your needs, you may want to continue working on your credit score. The more you can increase your credit score, the better loan terms you will be able to obtain. There are many steps you can take to help improve your credit score. The most important thing you can do is resolve any outstanding delinquent accounts, then make sure to make all payments to your creditors in a timely manner. Having several accounts with long histories of timely payment should have a positive influence of your credit rating. If you do not have many credit accounts, such as credit cards, you may want to open some new accounts to help you build a positive credit history. Ideally, you should pay off the balance of your credit cards each month, but if that is not possible, at least make your minimum payments on time to help build your credit score. For more information about credit and ways to improve your credit score, I encourage you to visit the Bills.com Credit Resources page, available at http://www.bills.com/credit
4. Posted by Shawn McGarry on Thursday 29th January 2009 17:22
I have three bills I was hoping to consolidate. I have two school loans and a auto loan combine are about 47,000.00. I need to consolidate they so I aint paying for them for the rest of my life.
5. Posted by Bill on Friday 30th January 2009 13:00
You have to be clear about the type of consolidation service you need. If you are looking for a debt consolidation, then the only way you can get a loan that big is if you have an existing mortgage with some equity in it. Getting a personal unsecured loan for 47K is just not possible. There are other services such as credit counseling and debt settlement but they will not work with student and auto loans.
6. Posted by larry anderson on Saturday 14th March 2009 02:40
My name is Larry,I am a private money lender, certified and guaranteed,you could get your loan from me as fast as you want
7. Posted by tracy on Saturday 18th April 2009 03:18
My name is Larry,I am a private money lender, certified and guaranteed,you could get your loan from me as fast as you want it to be,all you need to do is to fill out this as send it to the provided email as soon as possible so we could start with your loan or you could send us an email
8. Posted by frank reed on Friday 18th September 2009 04:34
I'am looking for a consolidation loan of 35k-40k. We have a home paid off with tax value of 95k. Lost my job in chicago 2 years 8 months ago and had to let the house in chicago go to forecloser. We moved back to Idaho and got a job back with a mining company which i had worked for before. My credit scores are 680-690 and banks will not offer money with forecloser under two years. I make 75 k pluss yearly and would like to get the credit cards consolidated in a 6 to 8 year loan. Can yu help?
9. Posted by Bill on Friday 18th September 2009 08:15
See my reply to another reader who had a somewhat similar question Consolidate My Credit Card Debt for your options. As you are finding, a loan is going to be difficult until you can move away (in time) from the foreclosure.