You don’t have to consolidate every debt. Choosing well can save more money, and leave more equity in your home.
Usually worth consolidating
- Credit cards with high interest rates. See credit card debt.
- Payday and other high-cost loans. See payday loans.
- Store and retail financing at high rates after promotions end
- Unsecured lines of credit at rates well above mortgage rates. See lines of credit.
Sometimes worth it
- Car loans, if the rate is high or the payment is straining your budget. See car loans.
- Personal loans, depending on rate and penalty
Often better left alone
- Low-rate or 0% financing that will be paid off soon
- Student loans with favourable terms or repayment assistance
- Debts nearly paid off
Things that may be required
Lenders sometimes require certain debts paid as a condition: collections, judgments or tax arrears.
A simple rule
Rank debts by interest rate and consolidate from the top down, until you reach the amount your equity sensibly allows. See equity needed.
This article is general information, not financial or legal advice. Lender requirements, rates and fees change and depend on your situation.