[USER]

This is embarrasing, but I’m a single mom and struggling right now. I’m going to have to take out a home equity loan to pay off a credit card balance.

I’ve never done this before.

Any advice on what to look for with a loan? Can I negotiate to get the rate down?

Thanks in advance for any advice.

[Michele]

Do not risk your home for credit. Look up the Dave Ramsey baby steps, follow his podcasts, read the Total Money Makeover and start working your way out of debt, even if it risks your credit rating.

There’s a class, too.

Better that than your home. You’re just shuffling money around.

You can do this.

[Jamie]

You are moving unsecured debt to secured debt, thereby putting your home at risk.

Do not do this.

[Sarah]

Are you able to do a balance transfer? Usually, the fee for a balance transfer is 4% and then you have 0% interest for at least a year- some cards even offer up to 21 months.

I wouldn’t tie your home to unsecured debt like a credit card.

[Christina]

How much cc balance are we talking about? Can you get a 2nd job/side gig/rent out a room for extra money to pay off the cc?

[Michael]

Nothing to be embarrassed about
Not financial advice but I don’t think you should take out a home equity loan unless it’s for investment purposes.

I would rather ruin my credit than take a loan on my paid off house under the worst case scenario.

Thats how strong my position is on this.

Go the balance transfer route or if necessary,depending on your credit, take out a high interest 60-72 month unsecured loan in which you can make early principal payments without prepayment penalties.
Citi/PNC/BOA..

Don’t put the roof over your head “on the line”
Then throw the cards in a drawer and forget they exist.

You will get an instant boost in your credit score consolidating everything into one unsecured payment.

Just make sure you don’t use the cards again or you’ll really spiral downhill.

[Allison]

I really hate the idea of taking out more debt against your home and risking your shelter.

Without details of what your financial situation looks like … I’d do ANYTHING but borrow additional against my shelter to satisfy consumer debt.

There has never been a time like today where hustles are readily available.

I’d exhaust every side hustle option before I’d take out that loan

[Lauren]

I think you’re better letting your credit card default than risking your home.

You can rebuild credit, you’re already in the home

[Rob]

If you’re looking for some options, checking out a consumer credit counseling service could be a good move. They can help negotiate your payments so you’re not getting hit hard financially.

Another route is to grab a peer-to-peer loan from places like Lending Club, which usually offer lower interest rates.

You could also try the credit card shuffle—get a new credit card with 0% interest and transfer your balance over.

I know some people might not agree with that, but it can really save you on interest costs.

You can just pay what you can each month for a year, and hopefully, you’ll be back on track by then.

Just steer clear of taking out a loan on your house to pay off credit cards; that’s not the best financial move.

[Brandie]

Do NOT do this! My parents refinanced their home 3 times to pay off cc debt. It’s not worth it.

What other options have you considered? What’s the situation?

[Jonathan]

Nothing to be embarrassed about but I wouldn’t risk your housing situation to pay off CC debt.

I would cut every non-essential item from the budget and increase your income even if it is a part-time job a few hours.

I know it’s overwhelming but nothing is impossible, hope everything works out.

[Zachery]

Once you pay off that cc debt make sure you close all your credit card accounts.

Itll help you in the long run.

[Jackie]

Usually, you can close the cards and negotiate the interest rate down rather than trading unsecured debt for secured debt.

[George]

Take out lower interest HELOC to pay off higher interest credit card bill is generally a great idea.

Make sure you have the discipline to pay it off, not simply an excuse to rack up more debt

[Author]

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