Are you carrying a lot of high-interest debt? If so, it can be overwhelming and cause a massive blow to your monthly budget. But the good news is that if you own your home, you may already have the cash you need to pay off those pesky credit cards, personal loans, or other debts and save a ton of money by using your home's equity.
What is Equity?
Home equity is the value of what your home is worth minus how much you've already paid down on your mortgage. To leverage your home equity, you can take out a fixed-rate home equity loan.
For example, if you bought your house for $200,000 and have paid $50,000 so far, but your appraisal comes in at $250,000, your equity in your home could be $100,000. That is a lot of money to use for a variety of reasons, including debt consolidation. And with home values skyrocketing, your home's value has probably increased substantially.
How can a home equity loan help me with my debt?
You can use the money from a home equity loan to pay off all your high-interest debts, such as credit cards, personal loans, student loans, and more. While you will need to make a fixed monthly payment, the interest rate on a home equity loan is often lower than credit cards or personal loans, saving you money and making it more manageable.
Advantages of a home equity loan?
A home equity loan for debt consolidation comes with some significant advantages.
Lower Interest Rates. Since your home secures the loan, it often has a lower interest rate than other options, such as personal loans or credit cards.
Lower Payments. Consolidating your debt into one monthly payment with one lower interest rate can reduce how much your monthly cash flow goes to paying down debt payments.
Fixed Rates = Predictable Payments. You can relax with the security of a fixed rate with the same monthly payments—no surprises.
Simplified Payments. By paying off multiple debt accounts with a home equity loan, you can enjoy one single monthly payment instead of several.
Ready to get started? Apply online with Arkansas Federal Credit Union in minutes. There’s no cost to apply, and the application process is easy.
Have questions? Call Arkansas Federal at 800.456.3000 or visit a local branch.
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