Refinancing Looking Up

Last week I was talking about how the benefits of debt consolidation with a personal loan were at an all time low. The difference between credit card and personal loans hadn’t been this low since 2001, hence the benefits of debt consolidation weren’t as high. That got me thinking.  Debt consolidation, as you may recall, isn’t just about personal loans.  So I thought I’d look into the benefits of consolidating into your mortgage.  The benefit of debt consolidation is the reduction in the interest rate.  I graphed the difference between credit cards and personal loans and the difference between credit cards and home loans.  The results on the benefits of debt consolidation were surprising.

As you can see, the benefits of debt consolidation with a home loan have NEVER been higher.  I should preface that by saying that by benefit I mean the difference in interest rates.  The downside with consolidating into your home loan is that you’ll potentially turn a short term debt into a long term debt and might end up paying back more.

Now you’ve got the full picture anyway.