You have went through the process of trying to lower your monthly payments, you have budgeted and you are still coming up short to pay the minimum monthly payments on your credit card balances. One way to lower your monthly credit card payments is to consolidate your debt into one loan.

This is called a debt consolidation loan which usually takes a home equity loan out to pay off the unsecured debts that you want to consolidate into one loan payment. This can lower the monthly payment considerably and make the debt more manageable.

Things you that you will want to beware of when you get a debt consolidation loan are if it is a secured or an unsecured loan. A secured loan can be tied to either a car, or a home. If you don’t make the payments you can loose your home or car. If you can get a personal loan that is unsecured to complete the debt consolidation, failure to pay it back will not result in a home foreclosure or car forfeitures. The type of loan that you will ultimately qualify for depends on your credit rating, the amount you are requesting and the type of debt you are going to consolidation. Sometimes there are up front points that can add to the cost of the debt consolidation loan and you should be cautious of these points as they can be costly. (I would never recommend taking unsecured debt and securing it with property)

A debt consolidation loan can often lower your interest rate considerably, and most often they are fixed interest rate. This will speed up the repayment process considerably. Another benefit to having a home equity debt consolidation loan is that you can deduct the interest off on your taxes.

Today debt consolidation loans are not your only solution and you should research all options available to you in reducing, settling and eliminating your debt before making your decision. The benefit to doing debt consolidation is that it may help save your credit rating, simplify the repayment of your credit card balances with lower interest rates which should reduce your monthly payment considerably.

Other debt relief options are Credit Counseling Services/Debt management Plans, Debt Settlement Programs (I would only recommend debt settlement with an attorney) and as a last result bankruptcy. For more information on these debt relief options please visit us on the web at www.tdrelief.com

Article by:
Christopher L. Kessler