[Siegrid]

• Remaining balance on home $336,000
• Current home Value-$800,000
• Monthly mortgage payment:$2,600

Thank you.

[Kat]

I just got an un-secured consolidation loan for 8% interest and no pre-payment penalty. Lots of emergency vet bills!

The thought of my home being collateral for a HELOC scares me. We are single income, though, and you just never know. I agree that learning discipline is imperative before doing either.

[Jacob]

You’d be trading unsecured debt for secured debt. Not a great idea IMO.

Anytime you transfer debt you don’t solve the problem, you just move it around likely to find yourself in a worse off situation. You need to get serious about the debt if you want to get it gone.

Your other post/comments mentioned:

• 60k CC debt
• Car debts
• School debt
• Retirement plan loan

I would suggest Dave Ramsey if you want to tackle your debts, you need a pay down plan, not a plan to transfer debt to something else. Get a plan and get serious about it and you will change your life forever.

[Brian]

I’d say not a bad idea as long as you’re disciplined enough not to rack up the debt again.

[Priscilla]

I would not transfer that amount and put your house at risk. If I were you I would use $12k of your emergency savings fund towards your debt and once your income increases, pay the debt down as fast as possible. If you are considering moving debt around at all, transferring to a zero interest card would be better.

Would you take out a loan in general for 24-29% interest? If the answer is no, that is exactly what you are doing by holding onto a large amount in your savings while you owe so much debt. It is costing you a lot with your decision.

Also, check out: Anyone get a recent HELOC or Home Equity Loan?

[Chaniel]

It depends on if you have savings, an emergency fund and a clear path to pay off the HELOC.

If you’re all good then I’d say go for it. Just remember there is a lot more at stake if you don’t make payments on the HELOC. May start thinking about how you got to $60k in credit card debt and if there is an underlying issue with spending/living above means. Just a consideration before using your home as collateral!

[Rebekka]

Bad idea until the habit of carrying a balance on credit cards stops. The pain of that interest can motivate you to stop increasing debt and find creative ways of increasing income.

[Michael]

Mathematically, not a bad idea. Caveat- only with an iron clad budget and some serious self reflection on how you got into $60k of credit card debt to start with and a no kidding plan never to go there again. Many folks will transfer a credit card balance and then run up the cards immediately after.

[Kim]

I will never understand leveraging your HOME against consumer debt.

[Janet]

First you need to cut up the cards so it is impossible to charge more. I would then find everything you can do to cut and reduce every expense until it hurts. Finally find another source of income such as a side hustle, second job, or selling stuff.

Work hard instead of moving debt around and it will be a good lesson.

You got this!

Explore these too: Why would anyone just have $150k in cash sitting around?

[Emma]

I’m going to say bad idea simply because my parents did this TWICE as well as filing bankruptcy twice. Just kept racking it back up. They have lived in their home for 30 years now and theoretically it should be paid off and instead they owe 3 times what they originally bought it for in 1994.

So mathematically it “maths” correctly but unless you address WHY you have so much cc debt in the first place and STOP it will further f you over.

[Author]

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