Consolidate Your Debt

(Having massive debt with multiple companies is one of the biggest stresses anyone can endure. It literally feels like you are walking around with cinderblocks on your shoulders all day long. )

There is no magic wand that will allow you to immediately erase all your debt, but you can consolidate it through a few different loan options. Even though you will still have to pay off this debt, you will have more time to do so and you will only have to make monthly payments on one bill, rather than five or more.

A1-credit.net staff writer, Shirley Lorimar, provides the various consolidation options in her article, "Credit Debt Consolidation Loan: The Three Types."

"A credit debt consolidation loan is a loan that is gaining increasing popularity as more and more Americans find themselves buried by insurmountable debt. You can apply for one of these loans on your own or by going through one of many free debt consolidation advisory agencies.

The first type of available debt consolidation loans is a refinanced mortgage, which erases your debt by using the equity you built up in your home. "The debt is then absorbed into your mortgage payments. Of course, you lengthen the amount of time that it takes to pay off your mortgage, but it may be well worth it when you consider that you will eliminate all of your other loan payments."

Having to make one monthly payment, which includes your mortgage is priceless. You will hardly notice the extra money you are spending per month and you will receive the satisfaction of not having to answer phone calls by angry creditor or banks. It's just like you bought an expensive home and you are slowly paying it off.

"The second type of debt consolidation loan is a second mortgage. This type of debt consolidation results in a lien being placed against your home. But again, all of your payments are combined into one payment in addition to your regular mortgage payment."

Taking out a second mortgage is probably the least desirable debt consolidation loan because it threatens your home ownership if you miss your monthly payments. Remember, you are in debt for a reason, if you have any doubt that you will be to make the necessary payments, a second mortgage is not for you.

The last debt consolidation loan option is a personal loan that allows you to pay off all of your creditors directly.

"While the interest rate is slightly higher than the first two options, it is still significantly lower than the interest rates associated with a credit card."

"With each of these different debt consolidation options, you save a great deal of money each month by lowering your interest rate and combining your payments."

While all options offer different incentives, they all accomplish the same goal. Now it is your job to decide which one best suits your needs and lifestyle.

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