Make paying down debt achievable and affordable with a HELOC
Many homeowners benefit from using our home equity line of credit (HELOC) to consolidate debt. They pay down higher-interest debt and have one simple monthly payment with clear terms. Explore how a HELOC for debt consolidation could work for you.
Simplify your finances with a HELOC for debt consolidation
If you own a home and have paid on your current mortgage to build equity in the property, you can now access that equity as an asset to make managing other expenses easier.
Borrow against your equity with a HomeEQ HELOC to access cash and pay down other debts, especially those with higher interest rates.
The HELOC works alongside your current mortgage, providing a new loan that offers flexible and affordable terms based on your specific needs.
HELOC Benefits for debt consolidation
- Get fast approval 24/7 with our digital application that takes only 10-15 minutes
- Borrow between $25k-$350k, up to 80% of your home’s value
- Choose your term lengths from 5-30 years
- Leverage equity from primary residences and second homes
- Avoid prepayment fees
How a HELOC for debt consolidation works
Homeowners tap into home equity they’ve built to finance other expenses. This could include debts such as:
- Credit cards
- Personal loans
- Student loans
- Medical bills
- And more
If you have enough equity, and qualify for a HELOC, you might secure a lower interest rate than these debts currently carry. This helps you pay down the debts more quickly and affordably.
Interest rates for HELOCs are often much lower than financing options like credit cards. And they typically offer easier qualification requirements and better terms than personal or student loans because you use your home as collateral. This comes with the risk of losing your home if you can’t pay back the HELOC, so it’s important to explore whether a HELOC is right for your situation.
HELOCs are also revolving. As you pay down the HELOC, you can draw from it again within certain terms like your draw period and loan limit.
HELOC for debt consolidation: Rates and terms
Explore a breakdown of our HELOC’s specific qualifications and terms to better understand whether it can help you consolidate your current debt.
How our digital HELOC works for you
Simple start
To get your personal offer, start an account now to share basic details about your situation.
Approved in 15 minutes
Finish the digital application for streamlined processing without traditional timelines.
Cash within days
When approved, you’ll receive access to cash within a matter of days to use for life’s expenses.
FAQs: HELOC for debt consolidation
When you apply for a HELOC, the required hard credit pull can cause a small temporary dip in your credit score like any financing. Once you apply the HELOC to consolidate and pay down your debt though, you’ll often see an increase in your credit score.
If you pay down credit card balances, for example, you’ll reduce credit card utilization. You’ll also add a new loan type, diversifying your credit types. Impacts like these improve and increase your credit score, as long as you continue to make payments on-time and keep debt in check.
Because HELOCs leverage your property as collateral, there is less risk to the lender. We can provide better terms to you, the borrower, which can make HELOCs more affordable than other financing options.
For example, interest rates for HELOCs are often much lower than financing options like credit cards, which can go to upwards of 20-30%. HELOCs typically offer easier qualification requirements and better terms than personal or student loans because the home is used as collateral.
Using your home as collateral does come with the risk of losing your home if you can’t pay back the HELOC. It’s important to explore whether a HELOC is right for your situation.
When you apply for a HELOC, your loan amount (or loan limit for a HELOC) will be determined by a handful of factors including your home’s value, your current equity, your credit score and income, debts, and more.
You can borrow up to 80% of your home’s value and will have a set draw period where you can redraw from the amount you’ve paid on the HELOC to use for other expenses.
Depending on how much debt you have, your loan limit could cover the entire balance of your existing debts in one monthly payment, consolidating all of the debt. Or you might borrow less and consolidate only the high-interest debts you have. This still allows you to free up high-interest costs so that you can instead use that money to pay down remaining debt more quickly and affordably.
What makes HomeEQ’s HELOC different?
Backed by our team’s combined mortgage experience, we’ve built a simpler way for homeowners like you to access the untapped equity paid into your home.
We’ve developed a truly self-service HELOC, from application to funding — all completely digital so that you can access cash within days. The application only takes 10-15 minutes. See if you’re approved by applying anytime, 24/7.
