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Should You Consolidate by Refinancing or Get a Second Job?
by Ed Nailor
Recently I heard a well respected finance advisor give advice to a caller on a tv show with this question..."We have about $20,000 in excessive debt, and with the minimum credit limits going up I am afraid that we will not be able to handle

Recently I heard a well respected finance advisor give advice to a caller on a tv show with this question...

"We have about $20,000 in excessive debt, and with the minimum credit limits going up I am afraid that we will not be able to handle even the minimum payments. I have spoken to a mortgage company about refinancing my mortgage and consolidating my debt into a payment we can manage. What should we do?"

The answer was given... "Do not refinance your home! Why would you do that? Why risk your home by adding more debt to it? I want you to go out and get a second job and work hard to pay this off."

I could not believe this advice! Basically this poor caller was told to go out, take time away from the family and work a second job (probably around $7-8 per hour) to pay off the extra debt. Forgetting the ramifications on the caller's personal life and stress load, lets look at the financial reality here.

A second job at even an aggressive rate of $10 per hour will average only 10-20 hours a week. Say $200 before taxes, roughly $150 after taxes. Take away the increased expenses occurred (gas, wear and tear on vehicle, etc) and count roughly $100 a week to add towards the debt. Again, we will forget the whole compound interest on the card balances (as if the credit card companies would do that!) At $100 a week, you would get that $20,000 paid off in roughly 200 weeks. That's nearly 4 years working every week. (Now add back the interest, and how long would that take?)

Wow.. not so bad huh? Where do I sign up?

What about refinancing the home and paying off that debt. Well, that same caller said they could save about $450 a month over the current set up. So now, if the caller still paid the monthly amount they already were getting by on, they would accomplish the additional $100 a week and not have to get the second job. Add to that the tax advantages from the interest paid on a mortgage, and which is the better way to go?

Honestly, I think the advice was wrong. My advice? Don't call into a so-called expert and ask for financial advice. Seek advice from a professional that can sit down with you and take the time to give you good advice tailored to your needs and goals.. not a talk show's agenda!

About the author:

Ed Nailor is a webmaster, writer and works in the financial and credit fields. His websites,, and have the most current credit card offers online. Each card has a comprehensive review, details about each offer, and a link to the site for instant online applications. For more information on home mortgages in North and South Carolina, or to contact Ed Nailor directly, visit his website at

The site is not responsible for any content in it. E-mail: alldir[at]gmx[dot]com
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