Should I take out a Home equity loan to get out of my $10,000 credit card debt?
2006-12-29 08:38:50 · 4 answers · asked by kelly l 2 in Business & Finance ➔ Credit
This only works if you close your open accounts, cut up your cards and not use them again.
If you fail to do this, you will find yourself in the same boat as millions of others - the same or higher credit card debt plus a second mortgage on the home.
Also if you think about it, you are converting short term purchases, maybe a meal out, new clothes or a vacation into long term secured debt. You will still be paying for these things 20 years from now.
If you do this, take whatever money you save on monthly payments, open a mutual fund account and put all your savings in it.
Don't let the loan make you feel rich.
2006-12-29 08:52:27 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Yes. The interest rate on the home equity loan would be far lower than the credit cards.
However, this is a common trap for people - they take out a home equity loan and then just rack up more credit card debt and find themselves right back where they started. You will also have to make lifestyle changes and learn how to manage money. You can't just keep living like you did when you got so far into debt.
2006-12-29 08:42:40 · answer #2 · answered by Phoenix, Wise Guru 7 · 2⤊ 0⤋
i agree with pheonix.....
all to often people use the equity loans to pay off high interest cards, then charge those cards right back up. silly trap.
put the cards in a safe place don't carry them use them only after very very very careful consideration
make sure that you pay off the equity loan as fast as possible,
2006-12-29 08:49:54 · answer #3 · answered by mhp_wizo_93_418 7 · 0⤊ 0⤋
Absolutely yes, but then you must discipline yourself to never pay for anything with a credit card that you can't pay when the bill comes.
2006-12-29 08:48:48 · answer #4 · answered by rhymingron 6 · 0⤊ 0⤋