Q. Would it be wise to consolidate two car loans (one is at a 5.89% with 21 months left on it; the other loan is at 8.75%; with 48 months left) into a $15,000 home equity loan at 9.71%?

A. The major reason to consolidate auto loans or credit card bills into a home equity loan is to reduce the amount of interest you're paying on that debt. This home equity loan would charge a substantially higher interest rate than you're paying on one of your auto loans.

We suggest that you take out a home equity line of credit (HELOC), which you could probably get for around 5.5% with good credit. It will cost you little or nothing to set up and you can pay it back on your terms.

The interest paid on home equity loans and HELOCs also is a legitimate tax deduction. That's not the case with the interest paid on auto loans. So making this switch will save you money in two ways.