Easy Guide to Debt Consolidation

Are you a homeowner that is looking to consolidate your debt? If so, this article provides the information you need to know.

Debt consolidation allows you to lower your interest rates, reduce your debt faster and improve your credit rating, all while saving money This article aims to answer a number of the most common questions and provide an understanding of the process. To that end we provide:

  • A simplified walk-through of the process using a generic example that follows the infographic below
  • A number of additional educational resources and online tools that will be of great help with debt consolidation
  • A link to our new and temporarily free, custom Debt Consolidation Options Report that details exactly what your options are and how you can save thousands of dollars

The infographic below provides an illustration of the debt consolidation process using a generalized example.

easy guide to debt consolidation

How the Debt Consolidation Process Works - A Simple Guide

In a nutshell, debt consolidation is just transferring your debts into a lower interest loan, either all at once, or in steps. It should be thought of as a first option, rather than a last resort.

There are a few basic steps:

  • Evaluate your debts and assets: How much do you owe? What interest rates are you being charged? What are your assets? These questions will help answer if debt consolidation is right for you (for more information on this, click here)
  • Do you qualify for a re-financed mortgage? This will be the lowest interest rate possible (Asides from particularly magnanimous family members) and will be your ultimate goal.Not everyone qualifies for this though but we can determine if you do.
  • Once you have determined your options, take out a lower interest rate loan and use the funds to pay off your other debts. This drastically lowers your interest rate, which allows you to pay off your debt faster without increasing your monthly payments. You can do this because more of your money is now going to the principal, rather than the interest.
  • This also simplifies the process, making you less likely to miss a payment because you simply forgot about it.
  • As you pay down your debt, you increase your credit rating. This makes it easier for you to qualify for a re-financed mortgage if you haven't already.

This process of faster debt reduction ==> increased credit rating ==> better financing is what we refer to as the Virtuous Cycle of Debt Consolidation and can save you thousands of dollars in interest payments every year.

At this point in time, you may be curious and would like to learn more about debt consolidation and what your specific options are. We haven't forgotten about the promise we started this post out with, so read on to find out about additional resources and how you can get your own customized Debt Consolidation Options Report...

Free Custom Debt Consolidation Options Report

As a new service to our clients and site visitors, we are now giving out free customized Debt Consolidation Options Reports. These reports use information that you provide to estimate how much money you could save per year over a 5 year period using a range of scenarios.

If you are interested in what you can find in our Custom Debt Consolidation Options Report, just click here.

Note that this is a new feature and is only being provided for a limited time, so don't miss out.

debt consolidation calculator

That's not all though! We have a number of other useful resource that you might be interested in....

Additional Resources

If you are interested in debt consolidation and other related topics and would like to learn more, feel free to check out some of our other educational content:

Interested in consolidating your debt? You can apply online. It's quick, easy, and you are under no obligation!