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Home equity loan for debt consolidation

But you might also be sitting on a hidden treasure chest that can help you tackle your debts head-on. Because they have lower interest rates than other loans, using a home equity loan or a HELOC to pay off debt is a viable choice for people who own much of their property outright, free of mortgage debt. Debt consolidation is debt financing that combines 2 or more loans into one.

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While you may intend to use your home equity loan to settle debt, you could find yourself using your lump sum frivolously and end up in even more debt. And, doing so could provide some relief. Fees apply, such as appraisals, title search, title insurance and legal fees. Then consider your options for the type of debt consolidation you would need. However, applicants with substantial debt may not be offered the most competitive interest rate on a loan.