Is it a good idea to use a home equity loan to pay off credit cards?

It can lower your rate and monthly payment because home equity loan rates are far below typical credit card APRs. The trade-off is that you move unsecured debt onto your home — if you cannot pay, the home is at risk. It works best when you have stable income and have addressed the spending that created the debt. This is an estimate, not financial advice.

How much can I save by consolidating debt with home equity?

Savings depend on the gap between your current blended APR and the home equity loan rate, the loan term, and the origination cost. The calculator shows your rate reduction and the change in monthly payment. A lower payment over a longer term can still mean more total interest, so check both numbers.

What are the risks of a home equity debt consolidation loan?

The main risk is that the debt becomes secured by your home, so missed payments can lead to foreclosure. Other risks: a longer term can increase total interest even at a lower rate, closing costs add to the balance, and freeing up credit cards can tempt new spending that recreates the debt.

Does consolidating debt with a home equity loan hurt my credit?

Opening the loan adds a hard inquiry and a new account, which can dip your score briefly. Paying down high credit card balances usually helps your credit utilization, which can raise your score. Closing the old cards entirely can reduce your available credit and shorten your average account age.

Home equity loan vs. a personal loan for debt consolidation?

A home equity loan usually offers a lower rate and longer term but is secured by your home and carries closing costs. A personal loan has a higher rate and shorter term but is unsecured — your home is not at risk. Compare both against your blended APR before deciding.

New

Home Equity Loan for Debt Consolidation Calculator — Should You Use Your Home?

See whether rolling high-interest credit card and other debt into a single fixed-rate home equity loan would lower your monthly payment and total interest — and understand what it means to move unsecured debt onto your home.

New Monthly Payment — Home Equity Loan

$313

Inputs

Total Credit Card Balance

$0$200,000

Average Credit Card APR (%)

0%40%

Other High-Interest Debt Balance

Personal loans, medical debt, or other balances you would roll in

$0$200,000

Average APR on Other Debt (%)

0%40%

Total You Pay Toward This Debt Monthly Now

$0$20,000

Home Equity Loan Rate — Fixed (%)

Home equity loans are fixed-rate and typically far below card APRs

4%16%

Home Equity Loan Term

Origination / Closing Cost (%)

Home equity loans carry closing costs — included so the math is honest

0%6%

New Monthly Payment — Home Equity Loan

$313

Total Debt to Consolidate

$25,000

Your Current Blended APR

20.56%

Home Equity Loan Amount (incl. fees)

$25,500

Total Paid Over the Loan Term

$37,532

Change in Monthly Payment

-$537

Total Interest on the Home Equity Loan

$12,032

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Coach Insight

Credit card APRs sit above 23% on average, while a home equity loan is fixed and typically far lower. Consolidating can cut both the monthly payment and the total interest — but it comes with a real trade-off: it converts unsecured debt, which a lender cannot take your home over, into debt secured by your home. A longer term can also lower the monthly payment while quietly increasing total interest. This calculator shows the full picture — the new payment, the rate reduction, and the total interest — so the decision is made on numbers, not hope.