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1) Assess your debt burden. Before you apply for home equity loan debt consolidation, make a list of all your debts except your mortgage. Next to the names of these debts, write down the total amount of the debt and what you're paying per month. Add up the total amount of your debt load and the total amount of your monthly payments. After you do this, you will have a better idea of what you need from home equity loan debt consolidation. If, for example, your debt amounted to $30,000 with total monthly payments of $1600, you would need a home equity loan of $30,000 to pay off your creditors and would want your monthly payments on that loan to be less than $1600.

2) Shop around for a loan. Though home equity loan debt consolidation can typically offer the lowest rates, you have several debt consolidation options. As you're shopping for consolidation loans, remember to factor in the costs of fees and points in addition to interest rates. The best way to compare loans is usually their APR. Here are the three main types of consolidation:

• Home equity loan debt consolidation. As mentioned before, these loans offer the best interest rates because they are secured against your home. In addition, because home equity loan debt consolidation is a type of mortgage, the interest you pay might be tax-deductible. With this type of loan, you might be able to reduce your monthly payments by as much as half.
• Cash-out refinancing. This option allows you to refinance your current mortgage for a larger amount and take the difference in cash to consolidate debts.
• Personal loan. You can get a personal loan to consolidate debts if you don't own a home or do not want to put your home up as collateral.

3) Impose a timeline. After you've signed up for home equity loan debt consolidation, figure out a timeline for paying off your debt. Home equity loan debt consolidation usually offers fixed monthly payments, so you should know exactly how long it will take to become debt-free.

4) Control spending. Remember that home equity loan consolidation can only help you if you don't rack up more high-interest debt in the process. Avoid using your credit cards.

If you have any questions, please visit our Frequently Asked Questions page.