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Have you been tossing around the idea of consolidating your debt? We think that’s wonderful! Debt consolidation is a great way to combine multiple debts and monthly payments into one payment with one interest rate. It can be a really great way to save money. While there are so many different ways to consolidate debt, we highly recommend looking into a home equity loan. Why?
First, home equity loans typically have lower interest rates than credit cards or other loans.
Next, interest paid on a home equity loan may be tax-deductible, which is not true for other forms of interest. For info on this, we suggest consulting a tax advisor.
Often, consolidating debt into one home equity loan could equate to a monthly payment that’s lower than your current monthly payments. With only one loan and one interest rate, you could be paying less.
When deciding if this is the right option for you, there are a few negative possibilities to consider as well.
To begin with, you are using your home as collateral, which is kind of a big deal. A home equity loan should be taken seriously and only used if you have confidence in your ability to repay it.
Also, the value of your home could change. If you borrow from your home equity, then the value of your home decreases you could potentially owe more than your home is worth.
Both potential issues will need to be taken into consideration before choosing to consolidate debt with a home equity loan, however, our trained lenders are ready to help you assess the pros and cons!
Let’s start 2021 with a clean slate!