Loan consolidation, home equity loans, or refinancing your home are ways to avoid repossession or loss of income through wage garnishment.  These options may reduce the amount of your monthly payment. 

 

However, the cost for borrowing is usually increased, because the borrowing time is extended and you may be borrowing at a higher interest rate.  If you can manage to pay your debts without loan consolidation, home equity loans, or refinancing, you probably will save yourself extra expense.

 

The use of these options generally do not improve poor money management habits, and the reduced monthly payment may encourage you to acquire more debts.

 

 

Your thoughts on this subject?  Your comments appreciated!

 

Content © Rich Brott, 2011

 email to a friend