Is a Mortgage Loan the Right Form of Debt Consolidation for You? (cont.)
Contributed by Melanie Vannuys
Do I Need A Mortgage Loan For Debt Consolidation?
Maybe yes and maybe no. Depending on the amount of credit card debt you are currently carrying, you may not have to go through the hassle of applying for a second mortgage to consolidate your bills.
Start with your bill drawer. Go through all of your bills and make notes of what you owe on each. If the combined balances are $5000 or under, you may be able to settle for a "do-it-yourself" form of debt consolidation - without taking out any extra money.
If you've been paying only the minimum monthly payments on your credit cards, this is the first thing that needs to change. Take your card with the highest interest rate and highest balance. Put as much extra on that minimum balance that you can. If you can put an extra $50 or $100 a month on top of the minimum payment, that would be great! Once you have been able to eliminate that balance, cut up that card! While it's true that you should keep one card for emergency use or smaller purchases, don't keep the one that has the highest interest rates.
Once you've paid off that highest card, take that $50 or $100 extra you've been putting on the other card and apply it to the next highest interest rate/balance. Proceeding in this manner may be a little painful at first, but it eliminates your debts without putting your home at risk.
