Home equity loans will have a much lower interest rate, usually less than half of what you're paying for a credit card.
Combining ,000 worth of loans at 20 percent into a single loan at 9 percent will save you at least half the monthly interest, so you can pay more in order to reduce the balance.
We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. You may be considering tapping your home equity to consolidate your credit card debt, a move that can lower your interest costs but has risks.
Many homeowners take cash out to pay off high-interest debt or make home improvements.
You can get a home equity loan or home equity line of credit, which is commonly referred to as a HELOC, and pay off the credit cards.
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Credit card debts can snowball into an overwhelming pile.
You can get a debt consolidation loan not secured by home equity but the interest rate usually will be higher because it is an unsecured loan.
A home equity loan offers advantages over some other debt consolidation loans.