You may be curious why some people are converting their credit card debt to a home equity loan. Why would they do that? Are there any benefits? To answer these questions, we’ve compiled 10 reasons on why transferring your credit card debt to a home equity loan is a great idea. Read on and be enlightened about improving your finances and cleaning up numerous credit card loans!
More Manageable Minimum Payments
Home equity loans typically charge for the interest only for minimum payments, resulting in you having lower minimum payments and gives you breathing room when your finances are not in such good shape.
Beats Transferring to Another Credit Card
Some people transfer a credit card debt to another card with a lower interest rate and while that may work, that only shaves off a small percentage. If you’ll think of the transfer fee that comes with doing this, you may not be saving any interest at all.
Save on Interest Charges with Lower Interest Rates
Credit cards charge interest rates of 19% to 21% while home equity loans charge only a portion of that. Need we say more?
A Chance to Improve Your Credit Score
Because a home equity loan is a lot easier and faster to pay off than a credit card debt, it will help raise your credit score by lowering your credit burden. A tip is to keep your credit cards even after you’ve successfully transferred your debts as unused credit will help further improve your credit score.
Better Flexibility and Freedom
Because home equity loans are typically interest only, you have the option to pay for just the minimum or pay off more of your debt depending on the current state of your finances. This gives you so much more freedom and flexibility.
Better Than Going for a Personal Loan
Because they are backed by the equity of your home, home equity loans are a secured debt that is seen as a safer investment from the lender’s point of view, hence why it has a lower interest rate and offers you more flexible terms when it comes to your credit rating and income.
You’ll Like the Availability of Customized Reports
Providers of home equity loans often will give you free information on customized debt consolidation so that you’ll be going into this better informed. Who doesn’t like that?
Faster and Easier Debt Reduction
One of the primary benefits of converting your existing credit card debt to a home equity loan is that it allows you to reduce debt faster by having better interest rates that let you pay more of your loan instead of merely paying for interest. This means huge savings for you!
Simplicity for Less Stress in Life
Paying bills has been proven by studies to increase anxiety and stress levels. By having only one bill instead of numerous credit cards, you’ll save time, money, and prevent yourself from missing a payment – all leading to a simpler, less stressful life.
Quick and Easy Online Application
If you’re not yet aware that you can apply for a home equity loan from the comfort of your home, then we’re letting you know that’s possible now! What’s great is that doing this will only take minutes and you’ve got nothing to lose!