Alternatives To Consolidate Different Debts Into One Loan

If you have equity in your home, consider using a home equity debt-consolidation loan to consolidate your debt.

The interest rate on a home equity loan will almost always be better than that on credit cards. Pus the interest on home equity loan is likely to be tax-deductible while the interest on your credit card debt isn't.

Just make sure you'll be able to make the payments on a home equity loan. Otherwise, you'll lose your house.

Resist the temptation to spend money unnecessarily until the equity loan is paid down. For example, pay cash instead of using either a debit or credit card. Put your credit cards in the freezer -- to be used only in emergencies. (You don't want to end up with the equity loan plus more credit card debt unless it's due to medical necessity. If you're paying large medical bills, see Uninsured to learn techniques for reducing your medical bills.)

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