Low home equity lending rates have prompted many borrowers to pay off higher-interest debt with a HELOC loan.

BankingMyWay reports:

“Those carrying considerable debt may have difficulty using balance transfers to consolidate it all. New credit cards may not have a high enough limit. In these cases, a home equity loan may be a more practical option. Of course, you have to have enough equity in your home to cover the outstanding balances. One added benefit to using a home equity loan instead of a balance transfer is that payments are often tax deductible.”

Paying off credit card debt with a HELOC can be a smart move, but there’s some risk involved. Although the rate is probably going to be lower, HELOC loans are secured by your home.

If you don’t pay back credit card debt, you’ll have to deal with annoying phone calls and ruined credit. If you don’t pay back HELOC debt, not only will your credit be trashed, you may end up facing foreclosure.

See Also:

HELOC Foreclosure

Tags | credit card, debt, debt consolidation, Heloc, HELOC foreclosure, home equity line of credit