When an individual is facing high monthly payments due to substantial debt to a credit card company, it is always one’s goal to lower those monthly payments so that they become manageable in short and long term. Credit card companies charge ridiculous interest rates that you just don’t see anywhere else. These rates should be avoided and debt consolidation is one of the more effective ways to make sure, you are getting fair value for your money. Lets say you have a debt of ?20,000 and your credit card interest is 19% compounded daily. Note the compounded daily; this is a technique the credit cards use to maximize the amount of interest you pay. Your payments will be in excess of ?4,183.80 yearly, which work out to be ?348.65 per month alone in interest. As an example the same rate of 19% on ?20,000 would work out to be ?4,149 if compounded monthly. An effective way to reduce these payments through debt consolidation is using the equity in your home. How this works is say for example, you have a property that is worth ?300,000 and you have an outstanding mortgage of ?175,000. You can borrow the ?20,000 for an amortization period of 20 years. Your monthly payments will come out to be ?180.60 at an APR rate of 9.4%. Which includes not only the interest you are paying on the loan, but you would also be paying 83.33 each month towards your principal. As a logical person it makes a lot more sense to pay lower monthly payments, while reducing your principal. A common mistake made is that people wait too long to get started on getting out of debt. The hope for a better opportunity and the lack of confidence in the process, forces the individual to keep paying these ridiculous interest rates, while getting deeper and deeper into debt. Equity in your home is there to be used, don’t let credit card companies drain your financial resources. Fight back with a debt consolidation loan, using the equity in your house. Save money on monthly payments and reduce your debt at the same time, it is a win, win situation.