Best way consolidate credit card debt
Hi Terry, I have close to $50,000 in credit card debt. I have a mortgage of about $255,000 with a $2000 monthly payment that my wife and I split, the home is appraising for about $378,000. I also have $16,000 left in student loan debt. Would a home equity loan be the best way to pay that credit card debt off? Are there other avenues I should consider to consolidate this debt? Are there any resources you recommend to people who have spending and budgeting problems like mine(credit card debt). Thank you
Terry Says
I have only ONE resource I trust, and I strongly recommend it. You should contact the National Foundation for Credit Counseling at 800-388-2227. That will connect you directly to the nearest local office. You can trust them to help you through this.
The problem with a home equity loan is that it is likely to be an interest-only payment that seems doable. But then in 5 years you get a balloon payment due for the balance! And if you currently have a low-rate mortgage, you won’t want to be refinancing it in 5 years to pay off that home equity loan.
Please avoid all those rip-offs that tell you to set aside money and they will negotiate for you. It just ruins your credit for years.
You might also want to apply for student loan forgiveness, depending on the terms of your loan. Get advice on that from Rae Kaplan at FinancialRelief.com.
