This not only simplifies the payments, but can also provide real debt relief by reducing those payments as well.A consolidation loan can reduce your monthly debt payments in two ways.However, these cash advances can also get you into trouble, because they usually reset to a fairly high rate once the no-interest period expires - often 16 to 18 percent.They also typically charge an up-front fee of several percent of the amount borrowed, so you need to take that into account as well. One of the best, and most popular ways to consolidate your debt is through a home equity loan.As you may know, many credit card lenders freely offer these to their customers with good credit, in the form of blank checks the borrower is invited to use as they wish.What's attractive about these cash advances is that they often offer 0 percent interest for a limited time, often 9 to 18 months, so they can be useful if you're able to pay off the whole debt that quickly.Because it's a secured loan, you can get a better interest rate than you generally can on a personal loan or other unsecured loan.And because it's a type of mortgage, you may be able to deduct the interest payments on your federal tax return.
Lenders will likely want you to still have at least 10-20 percent equity after taking out the loan.Consolidating debt with a home equity loan could be a good option. You may have high interest credit cards, loans and mortgages. This is the practice of rolling all your debts into a single, monthly bill. 2014)When monthly bills get out of hand, debtors frequently look to debt consolidation.Second, you may be able to set up a consolidation loan that lets you pay off your debt over a longer time than your current creditors will allow, so you can make smaller payments each month.That's particularly helpful if you can combine it with a lower interest rate as well. Basically, you borrow a single, lump sum of cash that's used to pay off all your other debts.