| -> | | | | remember that your home is the collateral for the loan, |
| Home equity loans offer several attractive benefits for | | | | so there is a great deal at stake. For this reason, many |
| debt consolidation. First, you are moving your debt | | | | homeowners opt for a home equity loan versus a |
| from a host of different lenders to one lender with a | | | | home equity line of credit when looking to consolidate |
| lower interest rate. You will also be paying off one | | | | debt. A home equity loan is a lump sum loan for a |
| lump sum in a fixed time-frame, instead of paying | | | | fixed period of time, while a line of credit works in the |
| various lenders various amounts on differing payment | | | | same way as a credit card or checking account, |
| schedules. In addition, the interest on a home equity | | | | making it tempting to continue to borrow money |
| loan is tax deductible. Finally, in most cases, less money | | | | against your home. A home equity loan is a more |
| will be coming out of your bank account each month | | | | secure choice for many homeowners. |
| to pay off your debt. | | | | What about refinancing? When you refinance, you are |
| In a recent article on Bankrate, Greg Pahl, co-author of | | | | replacing your existing mortgage, not just borrowing |
| "The Unofficial Guide to Beating Debt," states, "A home | | | | against the equity in your home. This means that you |
| equity loan can be an extremely useful strategy if it's | | | | would pay interest on your credit card and other debt |
| used properly, but people must have their eyes open | | | | for the entire length of your mortgage. |
| and understand the implications." You need to | | | | |