Is it a good idea to take out a small home equity loan to pay off credit cards?

Answers:9   |   LastUpdateAt:2012-10-15 23:32:02  

Question
Piper
Asked at 2012-08-12 05:13:03
$ 10,000 to consolidate debt in 7000, the current interest rate is 7.5 % you are currently paying between 13 % -23 % on cards
Answer1tonAnswered at 2012-08-12 06:51:02
No. You risk losing your home. Take the lowest amount owed credit card and pay it off first minimum at the other cards. Once you get that paid off , you will see that it is possible and then simply because with the next card and the next until they are paid. But once you get one paid off, do not use it again.
Answer2HanoiAnswered at 2012-08-12 17:06:03
Before doing this , cut the credit cards, or you'll end up back in the same place only without the safety net of home equity loan .

You did not say what he would do with the other $ 3000 ( HEL $ 10,000 - $ 7000 of credit card debt = $ 3000). I hope not to use this $ 3000 as an emergency fund . It would be best to take only the amount needed to pay off credit cards (after having cut them ) and then start making 'payments' to a savings account for emergencies, because there will be 7.5 % return on savings account.

An even better solution (if the mortgage rate is much lower than 7.5% ) would be to refinance and get cash . Thus, only one mortgage payment (instead of two) and have the available money aside for the emergency fund so you do not have to use credit cards for emergencies (and you know it will). < Br >
However, the interest should be tax deductible (as opposed to the interests of credit cards, it is not) .

The key here is to stop spending money that is not using credit cards. Everything you buy a credit card costs more than paying cash when you include the interest and fees. Put the money in a savings account for emergencies and money into another account to your new computer, or a big screen TV or newer (NOT new) car.
Answer3David M.Answered at 2012-08-12 22:21:02
Would you rather pay 7.5% or 23 %?

Mortgage loans usually can give you a long-term rates lower. Use the equity in your home . It is your greatest asset.
Answer4GeorgAnswered at 2012-08-22 14:13:02
An alternative is that you pay by credit card was smaller first, then the second, and so on . MedlinePlus MedlinePlus Check out the Dave Ramsey snowball Plan http://www . daveramsey.com / etc / cms / index .
Answer5bkayAnswered at 2012-08-26 15:54:18
This is correct in terms of the amount of capital that is in the house . ( Balance due versus what it's worth ) Pay cards and destroy all but one for use in emergencies . Interest on home equity loans are generally tax deductible credit card interest is not. Good Luck .
Answer6someAnswered at 2012-08-29 06:32:04
It might be worth doing , but only if you do not build up the balances on the cards again. MedlinePlus Pay cards, destroying all but one , and should only be used if you can pay immediately.
Answer7chemayaAnswered at 2012-09-12 04:38:07
If at all possible to avoid taking any type of loan in your home , do not. Once you start borrowing against the equity in your home that I will continue trying to find the "easy way " to solve their financial problems and accumulate more debt ... it's so easy to let it get out of hand . Take it from someone who has been there and has finally worked out of debt.
Answer8jelAnswered at 2012-09-17 05:11:03
I do not feel it would be necessary. Focus on a single card, the maximization of the payments to make minimum payments on the cards that you may have about the debt. After the debt is gone,Do it to the next card has more debt in the balance that used to go to the card you just paid off. Do this with all your cards . It's just a snowball effect going for it until it is free of liens . Good Luck .
Answer9bellas momAnswered at 2012-10-15 23:30:28
I would not risk your home for a small difference . Pay the highest card first, then work your way up . Focus on a single card at a time .
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