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Consolidate Bills - Refinance or Personal Loan
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, numberof 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 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
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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