CD and money market account rates are soaring! Earn more today
High-interest credit card payments can make your life feel more chaotic than it has to. Gain more ba...
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What are the advantages of a home equity line of credit (HELOC)?
Can I use a home equity loan for debt consolidation?
Americans are about $804 billion in credit card debt, according to consumer debt data from the Federal Reserve Bank of New York.
The average amount of credit card debt for someone living in the state of Missouri is $6,097, while the average amount for Illinois residents is $6,228.
While the average amount of debt Americans as a whole and as individuals hold has started to decline recently, it’s still a lot. If you don’t pay high-interest debt off quickly, it can start to interfere with your life plans, goals and dreams.
Paying off multiple debts at high interest rates can be cumbersome and difficult to manage. Worse, the heavy interest rates mean more of your money goes toward the lender and less goes toward paying down the principal of the debts.
To put it clearly, you’re spending your hard-earned money on interest instead of putting it into your savings account or spending it on things you actually want.
Also, if you have several credit cards, you have to manage making those payments each month. That means setting reminders to pay, remembering login information and making sure you have enough available money for each credit card. Who has time for that?
With current low interest rates and record-high home prices, now is a great time to tap into your home’s equity (or the positive difference between what is owed on a home and its current value).
A home equity loan or line of credit allows you to borrow a large amount of funds against your home’s equity for any use you want. If approved, you can consolidate your high-interest credit card debt within a matter of days.
Using a home equity loan or line of credit to consolidate debt into a single low-interest loan can slash the interest that you pay by several thousand dollars and help shorten repayment time by several years. Rates on home equity loans are generally lower than rates on personal loans and balance transfer cards, making them a favorable way to gain more balance in your life.
*Arsenal Credit Union may pay closing costs for home equity loans or lines of credit. If the borrower repays the loan within the first 12 months, the borrower must reimburse the credit union for the closing costs.