Credit Card Debt $ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+ Other Unsecured Debt $ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+ Number of Creditors    Select One 2 3 4+ Status of Bill Payments    Select One Up to Date About to Fall Behind 1 Month Behind 2 or More Months Behind I want to    Select One Eliminate My Debt Consolidate My Debt Seek Advice Own a Home?    Yes  No

Understanding Debt Consolidation Options

If you're drowning in consumer debt, debt consolidation can bring relief. Debt consolidation is the process of taking out one loan to repay a group of smaller debts. There are different options for debt consolidation, and it's important to know how each option works.

Home Equity Financing
Home equity financing can be an effective method of debt consolidation if you own your home. Depending on local real estate markets and available home equity, you may be able to borrow from home equity to pay off your debts. It's advisable to keep some home equity intact, and to avoid running up credit card balances after getting a home equity loan!

Home equity is the difference between what you owe on your home and what it's worth. Taking out a home equity loan to consolidate your debts can cost less than refinancing, and home equity loans may offer tax advantages over consumer debt. Consult a tax advisor for details pertinent to your situation.

Debt Consolidation Help for Renters
Renters can turn to financial institutions for a bill consolidation loan. Credit policies can vary, and a bank may not be willing to lend all of the money you need at lower rate than you're currently paying. Your lender may distribute funds to your creditors, and you'll repay them with monthly installments. Many people find making one monthly payment easier than paying multiple creditors; certainly it can help avoid late fees and other charges associated with overlooking payments.

Another option is to enroll in a debt management plan with a certified credit counselor. Typically, these services work with you and your creditors to establish an affordable repayment plan. You pay the credit counseling agency, and for a small fee, they distribute funds to your creditors.