Posted on: 13th May, 2010 11:00 pm
I have an interest only line of credit -- I pay about an average of $71 a month. The line is $30,000. I have no intention of using any more of that credit -- how can I reduce the amount owed?
You need to contact your lender in this regard. He will help you know how you would be able to cancel a home equity line of credit.
Keep in mind, by reducing the available credit, you may actually also be reducing your credit score. 30% of your score is based on your debt utilization levels. Those levels are evaluated on a line by line basis and on an aggregate basis. There is little reason to reduce your available credit in any circumstances, unless the available credit is an enticement for you to spend money on things you can't really afford.
To clarify further, since you said you wanted to reduce the amount owed, you should increase your payments so that you're paying monthly principal. Using the balance and the interest rate, anyone skilled with finance calculations can tell you what your payment should be in order to pay it off in your desired timeline.
To clarify further, since you said you wanted to reduce the amount owed, you should increase your payments so that you're paying monthly principal. Using the balance and the interest rate, anyone skilled with finance calculations can tell you what your payment should be in order to pay it off in your desired timeline.