Debt Consolidation Loans

Things that got me on the road back into good standing for my personal finances is when I used debt consolidation loans to bring all of the debt that I had back into one roof.

So, what exactly did I do? Really, what I did was a couple steps. Let me outline them below so you can understand what I did and hopefully they will help you out, or at least give you a guide for what to do in the future.

First I assessed what debt I had. What I had was the following: credit cards  two of them actually, in a home equity line of credit. Gosh, between those three items we had maybe $50,000 worth of debt. Obviously, what I was most concerned with was the credit card debt.

We consider getting a bigger home-equity line of credit, but our house had not appreciated enough to do that.

Next, we even considered consolidating our credit cards but that wouldn't work because we were pretty much maxed out on both cards and there was not room for both cards on any single one.

So this is what we did, we looked at refinancing our mortgage, because the rates were so low, and discovered that between the GUI we had in our house, and how the cost of her home at appreciated over the last seven years, we were able to do a lot with refinancing and this would be our best option.

Okay so we went ahead and refinanced, were able to wrap both the home-equity line of credit, and the smaller of the two credit cards, which was about $10,000 into the actual mortgage.
In fact, here is a quick vid on the whole debacle.




So, all in all we were able to reduce our monthly payments overall by about $400, which is pretty good in my book.

Now, this did a couple things for us. First is that it reduced our payments from four down to two payments, and while we weren't able to consolidate that debt into one payment it really streamlined the whole thing for us and made it easier to pay all of them overall.

Secondly, as I mentioned above we reduce the total payment by about $400 a month which we really really needed. We didn't use the entire amount to pay down debt, but probably around $250 a month went straight back into paying off more debt. The rest we used to actually afford paying more of our bills every month.

Along with that, getting rid of one of the cards in the interest rate associated with that, and wrapping that get into the debt consolidation loans mortgage did more than you might think. So we got rid of the high interest rate and traded that for her mortgage interest, which of course is tax-deductible come tax time every year. Now this saves you even more money in the long run.

While at the same time we had to pay and start the clock again on our mortgage, 30 years starting again, it works out very well overall.

What you think about that?