So you want to make smart decisions on how to use home equity so you can get the most out of your money.With a home equity loan or home equity line of credit (HELOC) you can use your home’s equity to pay for major expenses, such as: Since equity loans and lines of credit can often carry lower interest rates, using home equity for debt consolidation might be a smart decision for you.Use your loan or line of credit to pay off credit cards, student loans or a car loan.
Debt consolidation loans allow borrowers to roll multiple old debts into a single new one, ideally at a lower interest rate.
Compare loans for debt consolidation and learn about your options for consolidating debt.
The “debt-to-income ratio“, or “DTI ratio” as it’s known in the industry, is the way a bank or lender determines what you can afford in the way of a mortgage payment.
By dividing all of your monthly liabilities (including the proposed housing payment) by your gross monthly income, they come up with a percentage.
Use your home equity line of credit or loan to finance a college education.
Tapping into your home’s equity to pay for your tuition allows you to capitalize on the long-term benefits of higher education.
A typical Freedom Plus borrower, according to Toms, is in his or her mid-40s, with good credit, looking to consolidate credit card debt into a single fixed-rate loan.
With Freedom Plus, there are a few options for getting discounts on your interest rate: Co-sign discount: Freedom Plus encourages co-signers and rewards borrowers who have one by lowering the interest rate.
With a debt consolidation loan, a lender issues a single personal loan that you use to pay off other debts, such as balances on high-interest credit cards.