Debt consolidating home equity loans

While they’re commonly used to finance home improvement projects, borrowers are free to spend the money on whatever they choose, including education costs and debt consolidation.In many ways, a home equity loan functions similarly to your original mortgage loan, and is often referred to as a second mortgage.Many apply for a home equity loan from the same lender that provided their mortgage, but you’re free to shop around for the best offer.Remember, too, that a home equity loan is not to be confused with a home equity line of credit, or HELOC.If you have significant equity in your home, have the cash needed to pay upfront fees, and are willing to navigate a longer and more tedious loan process, a home equity loan is likely your best choice, as it will usually yield a lower interest rate, longer loan term, and lower monthly payment.Likewise, if you need a sizable amount of cash (think north of 0,000) and have the requisite equity, a home equity loan is probably the way to go.Because it’s a revolving line of credit and not an installment loan like home equity and personal loans, let’s set HELOCs aside for this comparison.Rapidly emerging as an alternative to home equity loans, personal loans are direct-to-borrower loans that are not secured by collateral such as a home or automobile.

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