Debt Consolidation Loans
Simplify your finances and save thousands. Consolidate high-interest debt into one low monthly payment.
CHECK YOUR SAVINGSWhat is Debt Consolidation?
Debt consolidation involves combining multiple debts—such as credit cards, auto loans, student loans, and personal loans—into a single loan with one monthly payment. By using your home's equity to consolidate debt, you can typically secure a much lower interest rate than credit cards or unsecured loans, potentially saving thousands of dollars in interest charges.
With a debt consolidation mortgage, you can pay off all your high-interest debts immediately and replace them with one affordable monthly payment. This not only simplifies your finances but can also improve your credit score by reducing your credit utilization ratio and establishing a positive payment history.
See How Much You Could Save
Before Consolidation
After Consolidation
Monthly Savings: $868
That's $10,416 saved per year!
Benefits of Debt Consolidation
Lower Interest Rates
Replace 18-25% credit card rates with mortgage rates as low as 7-8%, saving thousands in interest.
One Simple Payment
Replace multiple payments with one convenient monthly payment, reducing stress and late payment risk.
Lower Monthly Payment
Reduce your total monthly debt payments by hundreds or even thousands of dollars.
Improve Credit Score
Lower credit utilization and consistent payments can boost your credit score over time.
Tax Deductible Interest
Mortgage interest may be tax-deductible, unlike credit card interest. Consult your tax advisor.
Fixed Rate & Term
Lock in a fixed rate and payment for predictable budgeting, unlike variable credit card rates.
What Debts Can You Consolidate?
Credit Card Debt
Pay off high-interest credit cards (typically 15-25% APR) and save thousands in interest charges. Perfect for balances over $10,000.
Auto Loans
Consolidate car loans into your mortgage for lower rates and simplified payments, especially if you have multiple vehicles.
Personal Loans
Replace high-rate personal loans (typically 10-20% APR) with lower mortgage rates and longer terms.
Student Loans
Consolidate private student loans (federal loans have special protections you may want to keep separate).
Medical Bills
Pay off large medical bills or payment plans with one affordable monthly payment at a lower rate.
Other Debts
Payday loans, tax debt, business debt, or any other high-interest obligations can be consolidated.
How to Consolidate Debt with Your Home
1. Cash-Out Refinance
Replace your current mortgage with a new, larger loan and take the difference in cash to pay off debts. Best if you can get a lower rate than your current mortgage.
Best For: Homeowners with rates above current market rates
2. Home Equity Loan (Second Mortgage)
Take out a second mortgage against your home's equity. Get a lump sum to pay off debts while keeping your existing first mortgage. Fixed rate and fixed payment.
Best For: Homeowners who want to keep their low first mortgage rate
3. Home Equity Line of Credit (HELOC)
Open a revolving credit line secured by your home. Draw funds as needed to pay off debts. Variable rate with flexible repayment during draw period.
Best For: Homeowners who want flexibility and may need funds in the future
Debt Consolidation Requirements
Home Equity
- Need at least 15-20% equity in your home
- Can borrow up to 80-90% of home value (CLTV)
- Home must appraise for sufficient value
Credit & Income
- Credit score typically 620+ (640+ for best rates)
- Debt-to-income ratio below 43% after consolidation
- Stable employment and income verification
Important Considerations
Your Home is Collateral
When you consolidate unsecured debt (like credit cards) into a mortgage, you're converting it to secured debt. This means your home becomes collateral. Make sure you can afford the new payment.
Longer Repayment Period
While monthly payments are lower, you may pay more interest over time if you extend the repayment period. Consider making extra payments to pay off faster.
Closing Costs Apply
Refinancing or taking out a home equity loan involves closing costs (typically 2-5% of loan amount). Factor these into your savings calculation.
Address Spending Habits
Consolidating debt works best when combined with budgeting and responsible spending. Avoid running up new credit card balances after consolidation.
Ready to Simplify Your Finances?
Get a free debt consolidation analysis and see how much you could save. We'll compare options from 260+ lenders to find your best solution.