How can consolidating my debt save me money?

Author: Boychuk Mortgage Group |

A debt consolidation loan allows you to pool together several high interest debts into one lump sum payment at a far lower interest rate. In turn, this option allows you to reduce your overall monthly payments by as much as two thirds.

Some high interest debt may include, but is not limited to:

  • Credit Card Debt.
  • Line of Credit Debt.
  • High Interest Car Payment Debt.
  • Medical Bills.
  • High Mortgage Interest Rates.

In the process of debt consolidation, you will likely see your credit score improve greatly over the following 12 months.

A strong option to anyone who owns their home is using the equity in your home to refinance your mortgage. The equity in your home is ultimately determined by subtracting the amount owing from the current value of the home. Lenders will allow you to refinance up to an 80% loan-to-value, which means that you can pull out of your home any equity that exceeds 20% of your home’s value at that time.

While debt consolidation is not going to be for everyone, it plays as a strong option for anyone looking to lower their high interest debt, lower monthly payments, and increase your credit score over time.