What is a HELOC and Why Use It to Consolidate Debt?
A HELOC is a Home Equity Line of Credit. You are borrowing from a percentage of the value from your home. HELOCs are a revolving line of credit and work much like a credit card. You are able to draw cash and use it however you see fit. Many will use HELOCs and an emergency fund or as means to take on home renovation projects. Another way to use a HELOC is to consolidate high-interest debts to allow you savings on total interest costs and possibly pay off the debt earlier.
How Debt Consolidation works with a HELOC
Many credit cards carry higher interest rates. Many HELOC offers usually start with a low intro rate. Bridge is currently offering HELOCs with a limited time low intro rate of 2.20% APR* until the end of 2020. So how could transferring a high-interest debt to a HELOC from Bridge save you money?
Here is an Example:
Let’s say that you have a credit card balances of $2000 at a 20% interest rate. You are currently making $400 payments each month. It will take you 6 months to pay off this credit card debt in which you will have paid $106 in interest. If you were to pay off that credit card using a HELOC, you would still owe $2000 but at the lower intro rate of 2.20%*. You could still make $400 payments each month and have the debt paid off in 6 months. Using the HELOC method, you will have only paid $11 in interest compared to the $106 if you had left the debt on your high-interest credit cards.
Deciding on a HELOC:
You can take a close look at all of your debts and their interest rates to determine how much money you could save by consolidating your debts into a HELOC. If you decide that you would like to consolidate debt using a HELOC, Bridge is here to help make that happen with NO Closing Costs and a Special INTRO** RATE of 2.20% APR* until the end of 2020+