HELOC are a viable option for paying off debt, but in most cases it is not the best choice you can make. Before you make a choice for eliminating your debt, make sure you have researched all your options. Find out more about HELOC and paying off debt.
With the current economy many people are asking the question, can a HELOC pay off existing debt quicker? Well, the answer to that question is not an easy one for many reasons. There are many things to consider when you are thinking about a home equity line of credit.
If all things are be looked at on a level playing field, I would have to answer the question as "yes." But rarely is the playing field in our lives level. So there are other things you have to consider when you are looking for ways to pay off debt, especially if it is unsecured debt (credit card debt).
Let's look at paying off debt with a home equity loan. First of all, this is a loan and will require you to be credit worthy. But most important of all the loan will be secured with your home. If you default on this loan, you are putting yourself in a position to have your home foreclosed on. There are other options that will help you get out of debt without putting your home at risk. I will get into those in a minute.
If you do opt for a home equity line of credit, you will most likely get an interest rate that is considerably less than the interest rate on most credit cards. Also, you will be able to deduct the interest paid on this loan on your taxes. You must also understand that more than 70 percent of all people that pay off unsecured debt with home equity loans have credit card debt again within a year. This leaves you with both a loan payment and credit card payments to make each month.
A home equity loan is not your only option for paying off credit card debt and personally, they are not something I would recommend to someone that has debt. Two better options are consumer credit counseling and a self-managed debt elimination plan. One of the best guides for getting out of debt is Larry Winget's book, "You are broke because you want to be." This guide tells you step-by-step how to set up a budget and manage your finances so that you can pay off your debt.
Consumer credit counseling is another option for paying off debt. This works best for individuals that struggle with being disciplined with managing money. Credit counselors will works with your creditors and consolidate your debts without another loan. You will make one monthly payment to the counseling agency and they will distribute it to your lenders. Your fees will be eliminated and your interest rates reduced. Your credit card accounts will be closed and you will not be allowed to open new ones until, you have completed your debt management plan. Most plans last no longer than five years.
- Related Videos
- Related Articles
- Ask / Related Q&A
How can debt settlement in USA help you to become debt free?
By: Anirban Bhattacharya | 07/12/2009Unemployment, salary cuts and lay offs are the aftermaths of the recent recession. Incomes are shrinking, while the cost of living remains high and even continues to increase day by day. The common man already depends on loans for everything from homes and automobiles to electronic goods. Shortage of money leads to the overuse or mismanagement of credit cards among most consumers.
Help with debt in Birmingham
By: Steve Thatcher | 07/12/2009If you live in Birmingham, you may be experiencing debt pressures. Like the rest of the UK it has suffered with job losses in the recession. It may be that a debt management plan is the solution to your problems.
Legal issues are generally very important so choose your legal assistance with care
By: Paul Ingersole | 07/12/2009Legal issues are generally very important so choose your legal assistance with care. The initial consultation with most legal agencies and attorneys is free of charge. Use this time to help you get to know the party you are seeking help from as well as what they can offer you. Find out how much experience the individual handling your case actually has with your particular issue. Ask about education and professional experience.
Federal financial assistance is available in various forms
By: Paul Ingersole | 07/12/2009The internet is a great place to find resources for financial assistance for your various needs. You can also find information about specific eligibility criteria. Make sure you choose a reputable lender who you have researched to avoid becoming the victim of a financial assistance scam.
At one time or another most of us will have to ask for financial assistance
By: Paul Ingersole | 07/12/2009Sometimes we need assistance when it comes to our vehicles. You just never know when a flat tire or a sensor will go out. Having an emergency roadside assistance program will help you with minor issues like a flat tire or locking your keys in your car. It can also help you with more substantial issues including having to get a tow truck and a rental vehicle.
Top 3 Free Debt Consolidation Programs
By: Richard S. Johnson | 07/12/2009Getting a Debt Consolidation Loan can be a real advantage to you if you are trying to eliminate the debt that you have now. Many people are searching for a solution for them to pay off there credit cards and become debt free. With the ever changing economy now is the best time to try to get more financially secure and one of the best ways to do this is to get debt free. Remember that it is not your fault if you have become behind on your credit card bills because it is tough for all of us to ma
Steps to become debt free - have you considered a consolidation loan?
By: Copywriting 4 U | 06/12/2009If you have fallen into the trap of debt and you have no idea how to pay off your debt and become debt free then you may wish to consider taking out debt consolidation. A debt consolidation loan when taken out correctly can help you to pay off debt that you have built up due to unsecured loans, credit cards, store cards, or home shopping catalogues.
Find Out More About Freeing Yourself From Apprehension With A Consolidation Debt Loan
By: David Lathan | 06/12/2009If you find yourself up to your eyeballs in debt you may want to consider a debt consolidation loan. A debt consolidation loan can go a long way toward easing the anxiety you are feeling.
Credit Card Debt Counseling--->>>The Way Out Of Debt
By: Marjorie Salada | 01/12/2009 | Debt ConsolidationWhat is the best way of getting out of debt? Click on the link below for loads more information on how to get out of debt and become debt free.
Can a HELOC Help Pay Off Existing Debt Quicker?
By: Marjorie Salada | 30/09/2008 | Debt ConsolidationCan a HELOC help pay off existing debt quicker? Maybe, but it is a smart way of getting out of debt. Find out more about your options for getting out of debt.
Failed Gastric Bypass Surgery-Why Does it Happen?
By: Marjorie Salada | 28/08/2008 | Weight LossInstances of a failed gastric bypass surgery are more common than you think. Find out more about the reasons fo r failed gastric bypass surgeries.
Water Aerobics Routines for All-Around Fitness
By: Marjorie Salada | 26/08/2008 | AerobicsWater aerobics routines can offer a complete physical workout. Find out more about a complete water aerobics routine.
3 Tips on How to Lose Weight Fast
By: Marjorie Salada | 26/08/2008 | Weight LossMany people wonder how to lose weight fast. There really is not miracle. To lose weight quickly takes motivation and hard work.
What You Should Know About Fast Loans for Student with Bad Credit
By: Marjorie Salada | 24/08/2008 | LoansFast loans for students with bad credit can be found, but there are things you must know about fast loans for students with bad credit before applying.
What is a Cleansing Diet?
By: Marjorie Salada | 21/08/2008 | HealthCleansing diets have become very popular. they are are a great way to purify your system and boost yur energy. find out more about a cleansing diet.