Question: I recently consolidated all my bills with a home equity loan. they took all my monthly bills made them into a single payment and then put the loan out over a long period of time. I went from paying 486 dollars a month on all my bills to paying one bill of 176 dollars. There was no prepayment penalties at all, so when we get on our feet again, we can double up our payments or whatever, it is a good way to give yourself some breathing room if you need it. P.S. If you have bad credit (like me) there is a place that will still help you out anyway; gotta own a house though…..:)

Answer: Oh, and one more thing. The topic says ’save 3 to 5 hundred dollars a month.’ NOPE. A complete fiction. You’re not saving anything. Don’t kid yourself.

Debt is not an expense, it’s an obligation, and all you can ethically do is shift the time at which it is expected to be repaid. A debt consolidation loan converts short term debt payments, with high principal repayment, into long term debt payments, with low principal repayment. You aren’t ’saving’ . You’re the time at which you are expected to repay debt. And in the process, you’re incurring much more interest (over a longer time) than if you bite the bullet and repay your short term debt as fast as possible. The interest an expense, it’s the cost of renting someone else’s money. I am a mortgage loan officer by trade (this is when you all throw tomatoes! LOL) Anyway, I agree, debt consolidations can be a VERY dangerous thing! It is my job to help people save money, and contrary to my bosses beliefs debt consols are not usually the best way to do that. If one of my clients is head first in debt and I plan to do a debt consol for them, I tell them up front how to get out of debt. Pay it off in 5 years, not 10 not 20 and certainly not 30! One of my clients actually followed my advice. I combined all their debts (about 67k) into a fixed rate 5 year loan at 7.125% with 1.5 points. They reapplied their monthly savings(about 2k) and finished it off in 3 years and 7 months. Most people do not have the will power to do that, that is why I don’t suggest them ususally. This is all of course IMHO. There is no taking a break, or getting a much needed breather. It is still there looming in the dark, with interst payments adding up quickly.

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