Debt Consolidiation Help

When you have high interest rates and are struggling to make monthly payments on your credit cards, consolidation might be your only option. Debt consolidation helps to lower your interest rate as well as your minimum payment, so you pay more toward your principal, which helps you get out of debt faster. There are different ways to consolidate your debt, depending on your current financial situation.

Home Equity Consolidation

Using the equity in your home is one way to consolidate your high-interest credit card debt. Check with a reputable lender to see whether the value of your home is high enough to qualify for a home equity line of credit. If you do qualify for a home equity line of credit, the rates might be far less than your current credit card bills and make it worth using the equity in your home.

Refinance Mortgage

If you have enough equity in your home, you might be able to refinance your entire mortgage to a lower rate as well as pay off your other high-interest credit cards. Check with your current lender to see whether you qualify to refinance your mortgage and consolidate your other high-interest debt.

If you are struggling to make your monthly mortgage payments and do not qualify for a refinance, you might be able to modify your current mortgage through the government's Making Home Affordable plan. This can be done through your current lender and doesn't cost you anything. Some homeowners have saved hundreds of dollars a month. Speak to your current lender to see whether you qualify.

Debt Management Program

Consult a nonprofit credit counselor to see whether you qualify for a debt management program. A reputable credit counselor can go over your current financial situation and assist you with finding ways for you to get out of debt. If you enroll into a DMP program, credit counselors work with your creditors to lower your monthly interest rates and payments. You will then be put on a payment plan, which can save you money in interest and pay off your credit cards within two to five years.

Balance Transfer to Lower-Interest Rate Card

Consider transferring your balance from one high-interest rate credit card to one with a much lower rate. Then, close the credit card with the higher rate or don't use it. Be diligent with paying off your balance and be observant as to what you are spending every month. Put yourself on a budget, and be persistent. Some ideas for saving money include bringing a lunch to work, cutting back on going to restaurants and theaters, and being conscious of what you are spending.