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Credit Card Debt Consolidation With Home Equity
Credit card debt consolidation may be accomplished with a home equity loan or line of credit. This means that you may use the equity on your home to help pay for your outstanding credit card debt. This form of credit card debt consolidation is popular for those wishing to have secured debt.
Unsecured debt, unlike secured debt, is debt which is not secured using any asset as collateral. Collateral is property that you pledge as a guarantee to repay your credit card debt consolidation loan. Credit card debt consolidation without collateral is the only option for borrowers without a major asset, like a house.
Equity is the difference between how much your home is worth and how much you owe on the property. The amount of equity you have determines how much debt you can include in your credit card debt consolidation loan.
A home equity loan (this is actually what we are calling a credit card debt consolidation loan) is a second mortgage that lets you turn equity into cash. In this instance, obviously, you would be using the cash for credit card debt consolidation.
Home equity loans and lines of credit, whether used for credit card debt consolidation or not, are usually paid back in less time than first mortgages. Where mortgages are usually paid back in 30 years, credit card debt consolidation loans are paid back in half that time.
A line of credit to be used for credit card debt consolidation may be accessed by credit card, check, or balance transfer, either online or over the phone.