Times are tough, the market is bloated, and many people are ready to loose some financial weight. The Wall Street Journal recently published a list of “debt diets,” suggested for American consumers.

One such diet is the home equity line of credit plan. They explain:

“It’s like the Atkins high-protein diet: You can pay off your debt more quickly with a much lower interest rate by using a home-equity line of credit — and get a tax deduction in the process. But cheating by using the credit line to borrow more will ruin your hard work. And you have to have the right stuff for it, including adequate equity in your home and a good credit record, to qualify for the current rate, about 5%, according to Bankrate.com.”

Consolidating high interest debt (such as credit cards) with a home equity line of credit can save some borrowers thousands and help them pay off their obligations earlier. It’s true, however, that there are some risks. People who already have trouble managing credit card debt may find themselves struggling to control spending when they have access to a massive home equity line of credit. Additionally, HELOC borrowers risk their homes if they cannot pay back the money owed.

See Also:

Why Pay Off Credit Cards with a HELOC?

Will Paying Off Credit Card with a HELOC Improve My Credit Score?

Using Your Home Equity Line of Credit to Make Money

Tags | debt consolidation, Heloc, home equity line of credit