With the ease of getting credit like the pre-approved cards nowadays, it is not surprising to learn that the average American family in credit card debt carries a balance of $4000 on several credit cards from month to month.
While $4000 is not a significant sum, that figure accounts for the national average, and many families, in reality, own more than that. If your family is in credit card debt, you might need to consolidate your credit card debts before your credit card companies suck you dry of your money by charging you high interest and late fees penalty.
One of the best methods to consolidate your credit card debt is to apply for a home equity loan provided you own a home. Using your home as a mortgage, you’ll be able to get a lower interest rate loan than that of credit card companies.
With the loan, you can repay your credit card debts (which are of higher interest) and pay off just your home loan that is of lower importance. By doing this, you will pay lesser money in the long run because of the savings on the interest and the late fees penalty charge by your credit card companies.
You will also get to enjoy a more extended repayment period and enable you to get back to your healthy lifestyle again.
While you can make use of your equity to clear your debts, remember to learn the lesson of not to overspend. Because if you run into financial trouble again and fail to pay your home loan, you take the risk of losing your home altogether.
A home equity loan is only a tool to help you get back to a debt-free life. You still got to put in the effort, be discipline,d and keep to your financial plan and budget such that you can clear your home loan and live a debt-free life again.