Thankfully, if you own your home and have some equity built up, you can apply for a home-equity loan, which you can then use to pay off credit card debts.
4. Get a home equity loan and pay off everything OK, this one isn’t so terrible – IF you have financial discipline and are willing to put your house at risk. There are pluses, such as a lower interest rate and the deductibility of the interest payments. And a home equity loan can be relatively fast compared to a full-blown mortgage loan.
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Pay off my credit card debt with home equity loan. Therefore, using a home-equity loan can help you pay off your credit card debt much sooner, since less money goes toward interest. The interest charged on a home-equity loan is also tax-deductible for those who itemize deductions on their tax return.
In this video I go over when to use the equity in your home to refinance and pay off your credit card debt.. home equity Line of Credit – Dave Ramsey Rant – Duration: 7:46.
The reason you should never use a HELOC to pay off credit card debt is because you are transferring unsecured debt into secured debt. If you miss payments on your secured HELOC you could lose your home. Additionally, many people who use a HELOC to pay off their credit cards will end up charging more on to their credit cards again.
Homeowners sometimes use home equity to pay off other personal debts such as a car loan or a credit card. This can be dangerous, however,
Home equity loans have lower interest rates than credit cards, but carry significant risk.. which you can then use to pay off your debt or for any other purpose.
In fact, because of this generalization, some people make the decision to refinance their home mortgage in order to free up money to pay off credit cards. If you are considering doing this, realize that it’s rarely if ever a good idea to pay off credit card debt with the equity in your home.
Advertisement When you’re struggling with debt, it’s easy to go for the solution that will bring you the quickest relief. Many people choose to refinance their home and roll credit card debt into the new mortgage in order to get the cards paid off and start with a clean slate. While this move might make [.]