You can use your home's equity to consolidate debt starting with a home equity loan. A home equity loan is basically a second mortgage on your home taken out with using your home as collateral. Because the loan is a secured one you will receive a better interest rate. The lower interest rates will make it so your monthly payments are lowered. In the end you will have one creditor and one monthly payment.

While there are advantages to consolidating debt using home equity there is also one big risk. By exchanging your unsecured loans for a secured one you are putting your home on the line. This is because if you do not make the payments the lender has the ability to take your home and sell it on the market to collect on the loan. But if you have at least 20% equity in your home and will be able to make monthly payments then taking out a home equity loan to pay off debts can be a good option.

If you have decided on a home equity loan there are some decisions to make. All home equity loans are not the same. There are two types of loans and you will have to choose which one is the best for you. A flat home equity loan is a standard loan which is for a fixed amount. The amount will be based on the limits of the equity that you have invested in your house. If you use the entire loan amount and need more money you will have to get another loan. A better option may be a home equity line of credit as with this type of loan you can write checks against the amount of the line of credit that can be as much as 125% of the value of your home.

Make sure to shop around for the best interest rates, have your home appraised, and choose a lender that offers you the best possible deal.