Using a HELOC to Pay Off Debt
The end of January means a few things for some homeowners – coming to terms with holiday credit card bills and planning ahead for tax bills (either income taxes or property taxes).
A Home Equity Line of Credit (HELOC) can be invaluable here. A HELOC is one of three main strategies for accessing your home equity. Whether you or need access to funds to handle a large tax bill, accessing your home equity be a good move.
Here are three reasons you should consider using a HELOC with SF Fire Credit Union this winter to pay off debt – and a reason why you shouldn’t.
1. A low interest rate
A Home Equity Line of Credit will generally have a lower APR than credit cards because, while it is a variable rate, it’s secured by the equity in your home.
You might have used a credit card for your holiday shopping (for convenience, or maybe to earn points). But when it comes time to pay, a HELOC will let you pay off that balance at a lower interest rate, which will save you a lot in the long run, especially if you can pay more than the minimum.
2. Debt consolidation
If you have more than one outstanding loan, such as credit card balances on multiple cards, you can combine those debts into one with the SF Fire Credit Union HELOC. Simplify your banking by reducing the number of payments you make each month.