Debt consolidation is where you pick a reputable bank or mortgage company and they roll your debt into your home mortgage or a consolidation loan; if you even have that option. This process will eliminate collection calls, may lower your monthly payments and may reduce your interest rates. However, it may actually end up costing you more over time. There are costs to refinancing, and it’s harder to get approved in today’s market, particularly if you are delinquent on your debt or your debt to income ratios are too high. Don’t forget, if you refinance all your debts into your home, you're not getting rid of the debt, your just moving it from one type of debt into another and paying on it for the next 15 to 30 years; equating to tens-of-thousands of dollars in interest paid.

If you are seeking debt relief, select a method that will eliminate the debt, not necessarily move it from one place to another with the cost of a refinance or consolidation loan. Consider using No Debt Plan to assist you in choosing the debt elimination strategy that is right for you and your situation.