Refinance Your Home

Be careful with this one.  When you venture into the realm of paying off unsecured debt with secured debt, you’re playing with fire.  You need to ask yourself if you’re really fixing a one-time problem, or if you have bigger problems with spending money and you’re just going to dig yourself another hole, right next to the first one.  This option for making yourself your own best debt consolidation company requires that you have some equity built up in your home.  You’re basically borrowing money against the value of your home and paying off your current mortgage, using the remaining equity for debt consolidation.  The only problem is, you’ve just cashed out on your single largest investment and started over.  It may make sense if you really analyze it, though.

Debt Consolidation By Home Equity Loan

This is really very closely relate to the option described above, except you don’t throw away your existing mortgage to consolidate your debt.  You simply call the bank and ask them for a loan against the difference between the market value of your home and what you currently owe on it.  If your house is appraised at $150,000 and you have a balance left on your mortgage of $75,000, you can probably borrow $25k - $50k against the difference.  The key here is to use the money for debit consolidation, and not to make your problems bigger.  Again, this option involves transferring unsecured debt into secured debt which is always a risky operation if you have a spending problem.

So you can see there are lots of options outside of using a debt consolidation company.  But don’t let that dissuade you from contacting one or two of them and seeing what they have to offer.  Just keep your eyes and ears open for the warning signs that they’re trying to take you for a ride, and understand that you have options.