If you’re struggling with consumer debt, debt consolidation may be your best option. Debt consolidation involves taking out a new loan, then using those funds to pay off multiple debts you presently have. You may pay off medical bills, credit card bills or other consumer debts with a debt consolidation loan. Mortgage refinances are one way people finance debt consolidation, but personal loans or refinances on other property may be another option. In some cases, you may qualify for a debt consolidation loan with a lender who specializes in this type of loan. Depending on your situation, you could enjoy several benefits by taking out a loan to consolidate debt. Many times, a debt consolidation loan will drastically reduce the amount of interest you would otherwise pay on your debt to credit card companies or other creditors. Your monthly debt consolidation loan payment is also likely to be much more affordable than all of your individual debt payments combined. This can free up cash in your monthly budget and help reduce the financial burden of your debt. Debt consolidation can have several benefits, but it is important to remember that essentially, you are borrowing – again. If you see your zero balances on credit cards following debt consolidation as a sign that it’s OK to start spending again, you will be on the road to severe financial hardship. Before you borrow more with a debt consolidation loan, consider credit counseling to learn the skills you need manage your money and protect your financial security long term. A debt consolidation loan can be the first step you take on the road to financial freedom, but only if you approach borrowing with the attitude that you must make this the last time you incur major debt. If you refinance your home for debt consolidation, you are putting your most important financial asset on the line, after all. You aren’t likely to have any other recourse than bankruptcy if you continue to mishandle credit and your finances after debt consolidation.