How to Reduce and Consolidate Debt Using a Government Organization

Government organizations provide a variety of loan options for consumers in the United States. The most popular loans are federally-subsidized student loans. There's also the Housing and Urban Development Administration (HUD) which provides homeowner loans. Both of these government organizations can be used to consolidate and ultimately reduce your total debt.

Instructions

1

Access a current, valid copy of your credit report. This will help you determine if you'll qualify for a government consolidation. Visit annualcreditreport.com for a free copy (a federally-mandated website). You can also pay for a copy of your credit score, commonly known as a FICO score.

2

Determine your total indebtedness. This is helpful regardless of whether you have student loans or consumer loans. You'll need to know the total loan amount for which you'll be applying. Remember that if you are applying for a HUD loan, you'll need to have sufficient equity in your home to qualify.

3

Apply for a student loan consolidation loan at loanconsolidation.ed.gov. This is the government's approved consolidation site. Make sure you have all student loan statements, your social security number and income documents. There is no charge for this service.

4

Research HUD and FHA (Federal Housing Administration) lenders. The government is not a direct lender for homeowners; rather, they approve private lenders as agents of the government. You must find a private, FHA-approved lender to consolidate consumer debt.

5

Apply at an FHA-approved lender for a home equity loan or FHA refinance. Both of these products, if approved, will be insured by the federal government. So long as the loan for which you are approved carries a lower interest rate than your existing bills, you'll save money monthly and pay down your debt faster.