Using a home equity loan for debt consolidation is a workable solution for some, but is not for everyone. The following list of home equity loan pros and cons should help you decide if this type of program is right for you.
Home Equity Loan Pros
- Low interest rates
- Can be used for anything
- Interest is tax-deductible
- Payments are the same every month
- You can keep credit cards open (great for emergencies)
- No payments to credit counseling services
Home Equity Loan Cons
- Loan commitment is long-term (usually 15-30 years)
- House is collateral and can be seized in the event of a default
- You can keep credit cards open (terrible for running debt up again)
- More burden on you if you decide to sell house before debt is paid off
For more home equity loan pros and cons and other information on using your home equity for debt consolidation, check out the following:
