Pay Off Credit Cards - Option Two and Three

Option 2: Home Equity Loan
If current mortgage rates are higher than the home owner's existing mortgage rate, it may not make sense to refinance the entire mortgage. Instead, the home owner should consider getting a second mortgage, borrowed against the equity in the home. The extent to which a home owner can borrow against home equity depends on a calculation of the loan-to-value ratio (LTV), which compares the total amount mortgaged to the appraised value of the home. LTV ratios are usually between 80 and 100 percent, though keeping the LTV at 80 percent or below can help the borrower get a more attractive interest rate. What the lender does is multiply the LTV ratio by the value of the home, and then subtract the balance owed on the existing mortgage. The remainder is the amount that can be borrowed against the home's equity. For example, if the home owner owes $50,000 on a home that has been appraised at $150,000, the following would determine how much can be borrowed: Appraised value = $150,000 Appraised value times an 80 percent LTV ratio = $120,000 Subtract existing mortgage of $50,000 = $70,000 The result shows that the home owner could get a home equity loan for as much as $70,000. Home equity loans usually have a fixed interest rate and level payments over a term of 15 years. Home equity loan rates are usually higher than prevailing purchase mortgage rates, but lower than personal loan rates. Also, since home equity loans are a form of mortgage, the interest payments are generally tax deductible. A home equity loan differs slightly from a home equity line of credit (HELOC), which gives you access to credit on demand over time. However, since the idea is to pay off credit card debt immediately, getting a lump sum up front via a home equity loan is generally a better fit for this purpose than a HELOC.   If this sounds possible, on 



the above menu is the debt consolidation loan option.                               

Option 3: Personal Loan
Someone who does not have home equity available or does not want to borrow against it could pay off credit card debt with a personal loan. Like a home equity loan, this would provide the borrower with a lump sum to immediately pay off existing debts with, but unlike a home equity loan, a personal loan is not secured by a home. Because of this, personal loan rates are higher than home equity rates, but this option could still be beneficial because personal loan rates are generally lower than credit card interest rates.  If this sounds possible, on the above menu is the debt consolidation loan option.

How to Pay Off Credit Cards: Moving Forward
While any of the above options can solve the immediate problem of credit card debt, an important element moving forward is a budget discipline to avoid racking up further debts. Without that discipline, the borrower may simply add to existing debt problems until they become unaffordable, and if refinancing or a home equity loan was used, this could put the borrower's home in jeopardy. In short, these strategies help make debt more manageable, but it is then up to the home owner to manage it.

Of Course paying off your credit card debt will increase your credit score and start to rebuild your credit.  Why not check to see if there are credit report errors that need fixing?
    If you cannot use any of the debt loan options to pay off credit cards, then why not use a debt consolidation management service - you'll be paying down your debt with one monthly payment (you'll not be getting a loan)?  CLICK on image below.  This kind of debt consolidation will kill the credit cards you include, so save a low balance card OR Get a new credit card