Consolidating high-interest revolving credit card debt ($50,000 at 24% APR) into a 6.5% mortgage refinance immediately frees up thousands in monthly discretionary income.
1. Debt Consolidation Cash Flow Case Study
| Liability Type | Balance | Interest Rate (APR) | Monthly Payment Obligation |
|---|---|---|---|
| Revolving Credit Cards (4 accounts) | $40,000 | 24.99% APR | $1,450 / mo (Minimums) |
| Unsecured Personal Loan | $20,000 | 14.50% APR | $470 / mo |
| Pre-Refinance Total Debt Service | $60,000 | ~21.5% Blended APR | $1,920 / month |
| Post-Refinance Consolidated Payment | $60,000 (Added to Mortgage) | 6.50% Fixed APR | $379 / month ($1,541/mo Net Cash Flow Gain) |