Lauren Cobello » Blog » HELOC Debt Consolidation Tips and Tricks
This post was sponsored by Figure but all opinions are my own.
As a busy woman, you’re always looking for ways to simplify your life and save money. One way you can do both is by consolidating your debt with a home equity line of credit (HELOC), in this article I am going to break down the best HELOC debt consolidation tips and tricks. A HELOC allows you to use the equity in your home as collateral to secure a credit line with a lower interest rate than most other types of debt.
Let’s first tackle some the term HELOC.
How do you wisely use a HELOC?
A HELOC, or home equity line of credit, is a type of loan that allows you to borrow against the equity in your home. Because HELOCs are secured by your home, they typically have lower interest rates than unsecured loans. As a result, HELOCs can be a great way to consolidate high-interest debt, such as credit card debt.
When consolidating debt with a HELOC, it’s important to make sure that you don’t end up borrowing more than you can afford to repay. To do this, create a budget and make sure that your monthly HELOC payments are manageable. You should also consider the terms of your HELOC carefully, as some loans have repayment periods of 10 years or less. By taking these precautions, you can ensure that you use your HELOC wisely and consolidate your debt without putting your home at risk.
How do I maximize my HELOC?
A home equity line of credit, or HELOC, is a great tool for debt consolidation. By taking out a HELOC and using it to pay off your other debts, you can save money on interest and simplify your monthly payments. However, there are a few things to keep in mind when using a HELOC for debt consolidation. First, make sure to shop around and compare rates from different lenders. Second, be sure to consider the terms of the loan carefully before signing anything. Finally, remember that a HELOC is a revolving line of credit, which means that if you’re not careful, you could end up deeper in debt than you were before. If used wisely, however, a HELOC can be an excellent way to get your finances back on track.
Let’s now get into some HELOC debt consolidation tips and tricks.
The first step in any debt consolidation process is to know how much debt you have and what interest rate you’re paying on that debt. This will give you a baseline against which to measure the success of your consolidation efforts. To get started, pull your credit report from all three major credit bureaus and take a close look at your outstanding balances and interest rates. If you see any errors, be sure to dispute them with the credit bureau immediately.
Once you know how much debt you have and what interest rates you’re paying, it’s time to start exploring your options for consolidation. A HELOC is just one option; others include personal loans, balance transfer credit cards, and debt management programs. To decide which option is right for you, consider factors like the total amount of debt you want to consolidate, the interest rate you qualify for, and the terms of each loan or program.
The average homeowner has over $178k in home equity. They can use their equity to pay off debts, complete a home improvement, or get the cash they need to finance a major purchase for their wedding, small business, or education.
Homeowners who purchased or refinanced homes while mortgage rates were at record lows were likely able to both lock in a great rate and ride the wave of home appreciation as the housing market took off in 2021. Selling their home and moving may not be advantageous with current interest rates.
When looking for a company to work with, I recommend the company Figure. When facing a need for cash, Figure allows consumers to unlock up to $400k of their home’s equity in as few as 5 days. By using Figure you can find your rate in 5 minutes too! It’s super quick and easy to use!
When you enter your information on Figure.com they can quote your rate within 5 minutes and it won’t even affect your credit score! As a #FigurePartner I am super excited to share this company with anyone who will listen because I want to help you #Unlockyourequity.
Before deciding to consolidate your debt with a HELOC, it’s important to understand the risks involved. Most HELOCs have variable interest rates, meaning that if interest rates rise, your monthly payments could rise as well. Another great part about Figure is that their rates are fixed! You’ll know your monthly payment throughout the duration of the loan, making it easier for you to budget accordingly. Finally, if you use your home as collateral for a HELOC, you may have difficulty selling or refinancing your home in the future. So just know the risks before doing this type of product.
One of the benefits of consolidating your debt with a HELOC is that home equity rates are typically lower than other types of loans or lines of credit. However, it’s still important to shop around and compare offers from multiple lenders before deciding which one is right for you. When comparing offers, pay attention to factors like fees, interest rates, and repayment terms.
Once you’ve consolidated your debts with a HELOC, it’s important to create a plan for how you’ll repay the loan. If possible, try to pay more than the minimum each month so that you can reduce the loan balance as quickly as possible. You should also make sure to keep an eye on changes in interest rates so that you can adjust your repayment plan accordingly.
There are always some questions when it comes to this topic, so I thought I would answer those. I’ve written a couple of other blog posts on this before, including this one about how to pay your mortgage fast.
A home equity line of credit (HELOC) can be a great way to consolidate your debts and save money on interest payments. With these five tips in mind, you’ll be on your way to consolidating your debts and taking control of your finances!
Figure Lending LLC dba Figure. 15720 Brixham Hill Avenue, Suite 300, Charlotte, NC 28277. (888) 819-6388. NMLS ID 1717824. For licensing information go to www.nmlsconsumeraccess.org. Equal Opportunity Lender. *Terms Apply. Visit Figure.com for details.