Millions of Americans are up to their ears in debt. They struggle every month just to meet the minimum payment which just prolongs the debt. credit cards have high finance fees. Hence, it is difficult to pay down balances. In most cases, the minimum payment barely covers the finance charges. This makes it difficult to reduce the credit card balance.

One approach for eliminating or reducing debts involves acquiring a debt consolidation loan. Although debt consolidation loans will not miraculously eliminate your debts, these loans make is possible to reduce your debts faster.

In 2005 the value of home equity across the US was .3 trillion. The percentage of home ownership in 2005 was 69% down slightly from the record 69.2 % in 2004. Almost 124 million Americans own their own home. There is plenty of money available to lend.

If you obtain a debt consolidation loan, all your credit balances are lumped into one loan. Furthermore, debt consolidation loans have reasonable interest rates. This enables you to become debt free within a few years.

There are various ways to obtain a debt consolidation loan. Individuals with good credit may qualify for a personal debt consolidation loan. If you own a home, it may be possible to get approved for a home equity loan. Home equity loans are ideal because the rates are low and the terms fixed. Usually, homeowners are able to repay the money in five to seven years – sometimes less.

Just beware that home equity does not automatically go up every month like some would have you believe. Several factors far beyond your control determine the value of your home. Just within the last six months or so the value of homes in some parts of the country dropped by 10% in a month.

Before you get a home equity loan you should know these facts.

• They are secured by a second deed of trust on your house.

• If your financial situation changes your home could be at risk of foreclosure.

• Having to make two payments on your home can be a lot of financial strain.

• A lot of unscrupulous lenders could care less.

• Keep your eyes open to what the local housing market is doing. Just recently many areas experienced a 10% decline in values in one month causing many homeowners to owe more than their home was worth.

It is essential to use the funds wisely and borrow only what you can afford to payback. Most Americans who use their home equity to pay off their credit card debt refuse to change their habits and lifestyles, and actually see their zero-balance cards as an invitation to go shopping - perpetuating the cycle.

Before you put your home at risk with a second mortgage understand the risks. Explore all the possibilities. Just because a home equity loan for debt consolidation seems so easy to do and easy to get, doesn't make it the right choice for you. Don't press the EASY button.