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In general, a debt consolidation loan is a personal loan you use to pay off existing debt. This type of installment loan is unsecured (meaning you don’t need collateral to secure the loan) and has fixed interest rates and fixed repayment terms, generally ranging from 12 to 60 months or longer. When you take out a debt consolidation loan, you’ll often receive funds directly from the lender, and then use that money to pay off your old debts. Some lenders, like Discover Personal Loans, can even pay off creditors directly. Afterward, you’ll make regular monthly payments on your debt consolidation loan until it is paid off.
This method works for other types of property, but homes are the most common. A Fix & Flip loan is a short-term, high-interest loan that covers the cost of buying the property and making the repairs. With this type of loan, it may be possible to buy “fixer-upper” properties, also called distressed properties. Then you can do renovations with any remaining proceeds from the flip loans to bring each property back up to the standards of the current building codes. Usually, a professional “flipper” will also make aesthetic improvements for fix and flip deals that attract buyers willing to pay premium prices for a home in excellent condition.
Refinancing is a process homeowners go through to change the interest rate and/or terms of their current mortgage. In essence, refinancing is changing aspects of your mortgage. Refinancing is not taking out a second or additional mortgage, such as a home equity loan or home equity line of credit.
A construction loan is a short-term loan that covers only the costs of custom home building. This is different from a mortgage, and it's considered specialty financing . Once the home is built, the prospective occupant must apply for a mortgage to pay for the completed home.
Rehab loans are designed to help homeowners improve their existing home or buy a home that can benefit from upgrades, repairs, or renovations. A 203(k) rehab loan is a great way to help you create your own home equity fast by bringing your home up to date.
