3. Home equity loan or line credit

Pros:

Personal loans have lower interest rates.

To qualify, you do not need to have good credit.

Payouts are lower when there is a long repayment period.

Cons:

To qualify, you will need equity in your house. A home appraisal is often required.

You are protected with your home and you could lose it if you default.

You may be eligible to borrow money from your equity in your home if you are a homeowner. This can then be used to pay off any credit cards or other debts.

A home equity loan, which is a lump-sum loan at a fixed rate, works as a credit card but has a variable rate.

HELOCs often require interest-only payments for the duration of the draw period. This is typically the first 10 year. This means that you will need to make more than the minimum payment to reduce principal and decrease your overall debt.

Because the loan is secured by your home, it’s likely that you will get a lower interest rate than you would on a personal loan. You can lose your home if payments are not made on time.

>>>> The pros and con of using home equity to consolidate your debt