consolidation loan
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Related to consolidation loan: Debt consolidation
Consolidation loan
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Consolidation Loan
A loan that pays off two or more loans. A consolidation loan often comes with a lower monthly payment and/or interest rate than the previous loans, as well as a longer repayment period. The process is usually called debt consolidation, and is often used for student loans.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
consolidation loan
A new loan that pays off two or more existing loans or indebtednesses, usually resulting in lower payments.Home equity lines of credit are often marketed as consolidation loans, urging consumers to pay off high-interest-rate credit cards and automotive debt for lower-interest-rate, tax-deductible, mortgage debt.While the practice does reduce monthly payments significantly, it replaces relatively short term debt with long-term debt and results in higher total interest payments over time.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.