Paying Off Credit Card Debt with Home Equity Loans Just Makes Sense!

When you are looking at your checkbook at the end of the month, how much money are you paying out to credit cards? Now take a look at those credit card statements and look at how much of that money is actually going towards your principal. Just do me a favor and don’t eat first because the results are more than likely to make you sick. Credit card rates are disgusting and paying off this credit card debt with home equity loans just makes sense.

While the credit card companies are in a state of panic because of the amount of consumers that are filing for bankruptcy or just not paying their bills, they are actually punishing those of us that are paying their bills on time. They are decreasing our lines of credit and increasing our interest rates if we want to keep this card active. Keeping them and paying the interest rates that they are charging is just plain foolish.
If you have equity in your home, now is the time to fight back with home equity loans. Home equity loans have never been more attractive and with the disparity in interest rates, you will save an enormous amount of money every month. You can continue to pay the high rates of credit cards or you can pay the single digit interest rates of credit equity loans.

Let’s say you have a credit card with a balance of about $4,500 and an interest rate of 17%. If you can only afford to pay the minimal balance, you are going to be sending them about $120 a month. Out of that $120, only about half of it is going to knock down the principal. This means you are literally burning $60 a month. Now if you have several credit cards in this range, you will be be wasting hundreds of dollars every month.

This is where home equity loans come in. At the current time, you can get equity loans for as low as 4.5%. That is about 25% of what the credit card companies are charging. Not only will your monthly payments go down because all of your debt will be consolidated, but if you continue to pay the same amounts that you were before, you will be knocking down the principal much quicker and therefore eliminate the same debt load in less time.

Credit card debt can destroy a family’s budget and with current home loan rates, there is no reason not to take advantage of them and put you in a stronger financial position. Even if you pay the minimal amount the equity loans require, your money will be working more effectively in paying off credit card debt.

For anything that you have to do, whether its looking for the lowest possible interest rate on equity loans or credit cards, the managing of personal debt, the purchase of a new home, there is but one efficient way - one best way - of doing it. Efficiency will point out to you that one best way.

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