Why Not Wait?

One of the biggest snags people find when they seek to consolidate debt is that they have compromised their credit. This means that if you believe that credit card and other high interest debt may become an issue, you should address it before it gets out of control. Easier said than done no doubt, but it is essential that you have a handle on such things so that you can get the best possible rate when applying for a debt consolidation loan.

One of the best times to investigate debt consolidation is if you are carrying large credit card balances that you are merely maintaining and not paying down. When this happens, you are beginning a very perilous cycle. Carrying debt with such high rates can become catastrophic if you find yourself with diminished income. A leave of absence, a layoff, or even termination can quickly spiral into a dire financial situation.

By consolidating you give the debt a time horizon. Most often when you convert debt and pay it down you can eliminate it before you arrive at those inevitable bumps in the income road. If nothing else you will be in a better situation to handle them when you do.

With Or Without Home Equity?

Most the time if you have home equity to borrow against it is advisable to do so. Word to the wise, if you have a spending problem, get some help. Some folks who are a bit compulsive in their spending tend to descend into high cost debt after even after consolidation. If you have no compulsive spending issues and your finances for the most part are under control you will be well served by the low cost of borrowing on home equity.

In Texas and Florida there are special laws to protect against losing your home in the case of bankruptcy. Depending on the size of your unsecured high rate debt you may want to consult a CPA before consolidation. If you are in over your head it might make for a poor financial situation to take on bigger mortgage debt if a bankruptcy filing is likely.