Debt Consolidation Loan

Debt Consolidation Basics

Three very common problems among those with lots of debt are:

1) High interest rates
Some types of debt (particularly credit cards) can have extremely high interest rates – up to 25% or more. If you’re in that kind of situation, there’s a good chance your debt will grow faster than you can pay it off. Which is why a consolidation loan can often prove to be a better option: it may allow you to get a lower interest rate, which would save you money over the long-run.

2) High monthly payments
People with lots of debt also frequently struggle with high minimum payments – which are sometimes more than they can pay each month. That can lead to a domino effect where you miss payments, your interest rates get raised, and then you can’t stay above water. A consolidation loan can sometimes lower your monthly payment, and that can give you enough breathing room to get back on track.

3) Confusion because of too many bills
Another common obstacle to getting out of debt is when the sheer number of bills you receive makes it hard to even keep track of which payment is due on which date. Consolidation can help with this problem by reducing the number of bills you get down to a single one. That can make it easier to focus on getting out of debt.

While there are some real benefits to debt consolidation, it’s extremely important that you do your homework and understand if debt consolidation is a good idea. Especially depending on your specific situation and varied options as some are good, some are bad, and some are downright predatory. Its best to contact Jody at (702) 769-1791  to discuss these options with you in better detail to determine if debt consolidation will be effective for you.

Home Owners with Equity Have Options

If you have built up some equity and the interest rates remain favorable, it may make sense to refinance your home and use the additional cash you can borrow, over and above what you owe on your current mortgage, to pay off more expensive debts.


  • You can save a fortune by switching debts from the double-digits of typical credit card bills to the much lower rates on home equity loans and refinances.
  • There’s the possibility of being able to deduct the interest on home loans, whereas that’s not possible with credit card debts.


  • You’re putting your home on the line, which is extremely risky unless you are certain you can trust yourself to stop overspending and to faithfully pay off the home loan(s).
  • If you go for a variable rate loan, remember that what goes down may well go up, increasing your cost of borrowing.
  • Don’t unwittingly extend the length of time you’ll be in debt or it might cost you more over the long run than if you’d simply paid off those higher rate bills.


  • Don’t pocket the money your refinancing frees up every month. Instead, use it to create an emergency fund (if you don’t already have one). Once that’s set up, use the money as a pre-payment against your home loan or to boost your retirement savings.
  • Ditto with any tax refunds that come your way.