Debt Consolidation and Credit Cards - The Bills.com Blog
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Debt Consolidation and Credit Cards
Thursday, May 3, 2007
Question: To qualify for debt consolidation, must I have credit card debt?
Answer: Typically when people talk about debt consolidation, they are referring to consolidating credit card debt into one new debt payment. The consolidation loan is typically provided from a new credit card, an unsecured personal loan, or the proceeds from a mortgage refinance or 2nd mortgage.
If you are seeking to pay off debts that are not credit card debts through consolidation, you will most likely need to obtain the proceeds from a mortgage refinance, or second mortgage. If the interest rate on the mortgage is lower than currently on your other debts, you may save a significant amount in interest
from the consolidation. In addition, the interest payments on mortgage debts are typically tax deductible - another great benefit. However, be sure that you leave yourself some financial breathing room with this new mortgage payment - once the debts
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