Consolidate credit card debt with home equity loans

Most people with credit card debt find that it is very difficult to pay off the amount that they owe. The primary reason for this is the high interest rates that are charged by credit companies. It is almost a certainty that your cards have the highest interest rates of any loan that you have.
It makes financial sense to pay off your cards before you worry about paying off your other debts. In fact in most cases it makes sense to take out another loan at a lower interest rate to pay off your debt.
One of the best loans that is available to pay this debt is a home equity loan.
If you own a home that you have equity in it is very easy to get a loan against this equity that you can use to pay off your credit cards. The reason that this is a good idea is that a home equity loan has much lower interest rates than credit cards do, generally the interest rate is about a third that of credit cards. This will not only substantially reduce the total amount that you owe, it should also reduce your monthly payments making it easier to pay off your debts.
There is another huge advantage to using a home equity loan to pay off your credit card debts and that is for most people a home equity loan is tax deductible. Since you can deduct the interest that you are paying on your loan as an expense on your income taxes you have effectively lowered the interest rate by about twenty five percent, although this will vary depending on your tax bracket. This deduction effectively makes a home equity loan the lowest interest loan that you are likely to find.
If  you do choose to use a home equity loan to pay off your debt, you need to make sure that you don’t run up more credit. Unfortunately a lot of people use their loan to pay off their debt and then go out an max out their cards again. If you do this you now have both the new debt and the home equity loan to pay off and you are in worse trouble than before. You have to make sure that you pay off the home equity loan before you start to rack up more debt.
A home equity loan can be an excellent way to pay off your high interest debt and save a lot of money. There is probably no loan available to you that has a lower interest rate which makes it the ideal loan. Just remember that once you have paid off your debt you need to resist the temptation to go out and use them again until after you have paid off your home equity loan.