|
Consolidate Your Debt With A Home Equity Loan And Improve Your Credit Score
Written by: Carrie Reeder
A home equity loan is a loan based on the difference between what your current home value is and what you currently owe on your house. There are also mortgage companies that will loan a little over the equity you have in your home. They can usually do this safely because most homes appreciate in value over time.
If you have credit card debt at a high interest rate, or even at an average rate, you may want to consider getting a home equity loan to consolidate your credit card debt for a few reasons.
1. Having the credit card, but not being maxed out, or having the credit card paid off will boost your credit score. The amounts you owe make up about 30% of your credit score, that could be a huge difference if those accounts are paid off.
2. You can have a lower payment because of the lower interest rate you can get with a home equity loan. If having a lower payment helps you be able to make the payment on time, that will boost your score tremendously.
3. Lowering your payment will lower your debt to income ratio, which will help you when you go to get any other kind of financing in the future.
4. A home equity loan is usually set for about 5 years before it is paid off. Sometimes, making the minimum payments on your credits will never pay them off.
As you can see, there are some great benefits to consolidating your debt with a home equity loan. Its definitely something worth considering if it will lower your rate and lower your payment. About the Author
Carrie Reeder is the owner of http://www.abcloanguide.com, an informational website about various types of loans. To view our list of recommended home equity lenders online, visit this page: http://www.abcloanguide.com/homeequityloan.shtml
Home Equity Loan vs Home Equity Line Of Credit
Many people confuse a home-equity line of credit with a home-equity loan. With so many different kinds of loans it can get confusing. So lets look at the difference so you can get a better understanding of what works best for you.
Home Equity... read more
Advantages of Small Business Loans
When starting a new company or business, people may sometimes to
get some financial assistance in the form of small business
loans. Some current business owners or people who are interested
in starting a small business are not familiar with or... read more
Selecting a Lender for Your Small Business Loan
Selecting a lender can be as tedious and detailed a process as preparing a business plan or loan proposal. Many business owners and potential business owners are so concerned about being approved on a business loan that they forget the importance... read more
Return to Home
|