Can I pay off my $5,000 credit card debt with a home equity loan? Is that a good thing to do?
Tags:child care, credit card debt, credit cards, finance charges,
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I have about k in credit label debt that amassed from furnishing the brand new residence 4 years ago as well as carrying dual children. we have k in equity in my home (married the builder,lol). I’m sleepy of profitable 0/month when of it is financial charges. Monthly finance management (child care, etc.) demarcate me from profitable 0 month towards credit cards. Help.
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Have you heard of the debt snowball? It’s a method of repayment that uses the money you have to concentrate on paying down debts one at a time.
Using you home equity is tempting, but remember, you are trading unsecured debt for secure debt with your home as collateral.
The amount you owe is not that much. I don’t think it’s worth the risk.
Consistently paying as much extra toward the balance owed as possible will make an impact.
Also, if you’ve been paying on time and a loyal customer, call your creditors and ask if they will lower your interest rates.
Yes. Pl get rid of credit card demons. High time we pay off and destroy credit cards. They are the real blood suckers. Respective governments should evolve a permenant plan to save their citizens from the clutches of these ruthless banks.
It sounds like a very good idea to me. If you get this amount at 5.25% (typical for a HELOC) and pay it back at $150 a month, you will be done with the balance in three years. Just try not to be tempted to pay it off at the minimum payment (which would be about $40 a month) or you will be paying for this furniture after your children are done with college.
Also, try not to treat the HELOC as a piggy bank. Use it for short term needs or major improvements to your home, and pay it back as fast as you can, so you won’t find yourself in a position with no equity in the house.
Keep in mind that you are pledging your house to this debt. I know a couple of people who did this to buy fancy cars, and when they couldn’t pay the loan, they were in foreclosure. At least with a car, the worst that could happen is you lose the car.
For an amount this modest, though, it is probably safe.
No, a HELOC is not good. You claim to be unable to pay these debts.
Not paying a credit card makes a bank angry.
Not paying a mortgage makes a bank take back your house.
No, it’s not a good thing to put credit card debt on a HELOC. You’re taking unsecured debt and making it secured debt… don’t, just don’t. Can you afford cable television, if so cancel it and apply that monthly amount to paying off your credit cards. Do you go out to eat, if so, stop and take that money and apply it to your credit cards. My guess is that if you cut out the uneccesary expense, you can get out of that $5,000 debt within a year. Skip vacations, cut coupons, cancel the internet, work overtime, get a second job, etc. Do you have an emergency savings built up? Trading your credit card debt to a HELOC isn’t going to make you more financially secure. You spent the money, now you may need to live frugally for a few months to get it payed off. Hopefully you’ve learned the lesson of, if you don’t have the money you don’t purchase the items. Furnishings for a new home are not necessities.
The short and quick answer is YES otherwise you are paying way to much for credit even though you are still borrowing against your home equity.
Check out http://www.MyRateCredit.com for some tips that I also got from there.
Yes, switch your credit card debt to a lower interest home equity loan. BUT, be diligent and pay down the $5K home equity loan.