Use Home Equity to Consolidate Credit Card Debt and Personal Loan Debt

Your house can do more than simply keep a roof over your head. It's also a source of value you can transform into funding for numerous uses, including consolidating personal loan debt and credit card debt.

What Is a Home Equity Line of Credit or Home Equity Loan?

Both a home equity line of credit (HELOC) and a home equity loan enable you to use the value of your home to access money, but they work differently.

A home equity loan lets you withdraw a lump sum to use right away. Then, you will pay back the money with fixed payments over time. 

A HELOC gives you flexible access to borrow when needed, similar to a credit card. You can take out money, pay back the balance and take out funds again as required during your draw period. Afterward, there's a repayment period to pay back the outstanding balance.

Using Your Home Equity for Loan Consolidation

One way to harness a home equity loan or line of credit is to consolidate debt. If you currently have debt from credit cards or personal loans, consolidating can simplify your financial life and help you reduce monthly expenses.

These options enable you to take out a loan or line of credit to pay all your separate debt payments. Then, you have one longer-term loan, typically with lower interest rates than other financing options. 

To determine whether a home equity loan or HELOC is a good choice for you, use our debt consolidation calculator to compare your existing debt to a consolidation loan. 

10 Other Ways to Maximize Your Home's Equity

A home equity loan or line of credit offers the financing to support you in numerous situations. Here are other ways you can take advantage of a HELOC or home equity loan:

1. Renovate your house: Use this cash to reinvest in your home and finance the improvements. Redo your kitchen, upgrade your bathrooms or make any other changes to your property.
2. Cover medical bills: A home equity loan or line of credit can help you cover medical costs for your peace of mind.
3. Start an emergency fund: A HELOC gives you flexible access to funding when the unexpected happens.
4. Kick-start a new business: Make your dreams of business ownership a reality by securing funding through a home equity loan or line of credit.
5. Add accessibility upgrades to your home for retirement: Transform your home into a place where you can grow older with improvements like bathroom modifications, grab bars or ramps.
6. Make a down payment on a vacation property: Use your home equity to invest in a vacation home for you and your family.
7. Invest in energy-efficient upgrades: Build home value through upgrades like solar panels or insulated windows.
8. Pay for your child's education: With a HELOC, you can help pay for your child's college tuition and other educational expenses.
9. Buy a new car, boat, RV or UTV: Using your home equity can help you get a better rate than other borrowing options.
10. Use the funds for anything else you can imagine: A HELOC or home equity loan gives you funding that you can use for almost any expense you can think of.

Explore Home Equity Options at First Commonwealth Bank

As you pay off your mortgage, you earn home equity, which offers a source of funds when needed. At First Commonwealth Bank, we provide home equity loans and home equity lines of credit to help you consolidate personal loan or credit card debt.

Learn more about our options and how they can help you meet your financial goals.