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yadira_keroes · Joined: 19 Sep 2007 Posts: 1 1.51 Dollars($)

Hello,

My question is, would it be better for me to get a Home Equity line of credit to pay off most of my bills or consolidate my debt? When my husband and I married, we noticed that the majority of the credit card debt was mine. Being that I do not think he is responsible for this, I was thinking of concolidating my debt. But I have this negative association with consolidating. I have always heard that consolidating means you could not pay your bills on time. That is not the case with me. I have always paid on time and, when possible, more than my minimum. But now that we have a home and other bills, these little $60 or $150 payments a month I think is making it harder for us to save for our future and the future of our kids. I have 3 major credit cards, all within $3000-$6000 on them. Plus I have a student loan of $8000. My husband has 1 credit card for $2000 that I think we might include in the equity line or consolidation. I am only 25 years old and I do not want my husband to pay for my dues. The majority of these bills were because of school.

helping_user

Welcome Yadira.

You can take out a home equity line of credit to pay your credit card debts. But the only problem with it is that, if you default any time and are unable to carry on with the payments, then you may lose your home. Considering this, I should say consolidation is better but when you go for it, your credit is affected to some extent.

Consolidation does not allow you to stop paying for the loan. It's a process where you approach a debt consolidation company which negotiates with your creditors to lower the interest on your loans. Thus, you are paying the principal loan amount along with a lower interest payment.

However, in your situation, if you haven't made any late payments, then I think it will be better if you consult a credit counseling agency.

The credit counselor will guide you on how to manage your finances and will prepare a well-planned budget for you keeping in mind your income, expenses and debt payments. This will hopefully help in getting bit disciplined with your finances, so that you need not take up an equity line of credit against your home.

Thanks.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Yadira,

In this situation, when you have so many debts, you can go for a Debt Consolidation mortgage. By borrowing this type of mortgage, you can consolidate all your high interest debts into a single loan which you can easily manage. This type of loan provides you with the facility to repay your debts with a reduced interest rate. Thus it will lower your debt payments. To know more on debt consolidation mortgage, you may refer to http://www.mortgagefit.com/debt-consolidation.html

wildstorm_films · Joined: 22 Aug 2007 Posts: 130 8.74 Dollars($)

Yeah I wouldn't go with a HELOC. Very risky and if you default, your done in a bad way.

livinginnky · Posted: Mon Sep 24, 2007 2:29 pm Post subject:

Guest

I think, as you have so many debts, it is better for you to go for debt consolidation. Thus you can get out of debt and also latter on save for your future too.

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Better to get a Home Equity Line or Consolidate Debt