| You see them all the time. Those ads and websites | | | | the interest rate is so low is that debt consolidation |
| that scream "Consolidate Your Debt & Save Big!!" | | | | loans use the equity in your home to secure the debt. |
| Are they full of you know what? Can you really | | | | If you fail to repay the loan, you could lose your home. |
| consolidate your debt and save big? The answer is: | | | | If the credit card bills are high due to emergency |
| Sometimes, on both counts. There are definitely | | | | expenses, the likelihood of you continuing to increase |
| circumstances when it is the best course of action to | | | | the balance on your credit cards is fairly low. You can |
| consolidate your debt and lower your monthly cash | | | | put the equity in your home to work for you to help |
| outflow by getting a good debt consolidation loan. The | | | | your cash flow by substantially decreasing your |
| key is knowing when that is, because there are also | | | | monthly credit card payments. |
| times when it definitely not the correct thing to do. | | | | If you have, and continue to increase your credit card |
| If you have gotten in a bit over your head with monthly | | | | balances through a pattern of spending, you are |
| bills, and many people have done just that, you first | | | | probably a poor candidate for a debt consolidation loan |
| need to analyze your expenses and income. Where | | | | until you change your spending habits. If you fail to do |
| does your money come from? Where does it go? If | | | | so, you will continue to spend more than you take in |
| much of your debt is credit card bills, you need to look | | | | every month. Once you get a debt consolidation loan, |
| at what you used the cards for. Was it emergency | | | | you will no longer have the equity in your home to bail |
| expenses such as car repairs or medical bills? Or do | | | | you out. You could easily lose your home to |
| you have a consistent pattern of spending for things | | | | foreclosure. You must decrease your nonessential |
| such as clothes, dining & drinking out, recreation, | | | | spending each month. While it may be nice to buy a |
| Internet purchases, jewelry and performance car parts | | | | new outfit or go out with your friends every week, |
| / accessories? The latter can be considered | | | | This qualifies as nonessential spending. You need to |
| non-essential consumption. While it does help the | | | | stop such spending until you get your credit card bills |
| national economy in the short term, it does little for | | | | under control and increase your monthly income. |
| yours. | | | | A debt consolidation loan is a great tool to help your |
| If you have incurred some emergency expenses that | | | | finances, but only in the correct situation. Like every |
| caused your credit balance to substantially increase, | | | | other tool, you need to use it in the right circumstances. |
| but it was an extraordinary expenditure, you may be a | | | | Just like you wouldn't use a screw driver to pound in a |
| great candidate for a debt consolidation loan. You | | | | nail, you shouldn't use a debt consolidation loan except |
| must realize that, if you obtain such a loan, the reason | | | | in the proper situation. |