If you have a substantial amount of debt and own a home, then a debt consolidation loan through a HELOC may be the right option for you. With a debt consolidation loan you have to consolidate each of your high interest credit cards, as well as your consumer loans. The loans are consolidated into one affordable payment.

You can consolidate debt with a home equity line of credit as security. Using a home equity line of credit as a debt consolidation loan is a secured loan where your home is security against the loan. The lender places a lien on your house until you pay off the home equity loan in full. You continue to own your home as loan collateral. This type of debt consolidation loan will keep you out of bankruptcy and the creditors away. This type of loan will allow you to save some money, because your monthly payments will be less.

There are several pros and cons to using a HELOC as a debt consolidation loan.
The following are a list of some of the pros and cons.

Pros
• The interest you pay on your equity debt consolidation loan may be tax deductible.
• The debt consolidation loan is an excellent way to stop your house from going into foreclosure or bankruptcy.
• Allows you to get out of debt fast
• One monthly payment can make it easier for you to budget


Cons
• Depending on your loans and debts, there may be a risk involved when paying unsecured debts with a secured loan.

• It usually takes longer to payoff a debt consolidation loan
• If you can’t make your payments, then the lender has the right to foreclose on your property
• Sometimes you can end up with more debt than before.

Recommended Online HELOC Lenders - We maintain a list of recommended mortgage companies online and update the list regularly.

Information about HELOC’s- Read this article to learn more about HELOC’s and how they work.