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iVillage Member
Registered: 02-19-2003
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Mon, 11-21-2005 - 2:10pm

Read the DSG Rules of Play, then vent about your debt problems.

 

Kerri Kerr
Sr. Community Moderator
Home & Garden | Food
iVillage.com

iVillage Member
Registered: 04-03-2007
Tue, 04-03-2007 - 9:14am
I have been a lurker on this sight for a long time and have read the great advice you guys give, and consider your guite knowledgable. I'm in credit card debt to the tune of $15000.00 (not all of it was frivolous, some medical) Right now I have an excellent fico score of 803. I have an equity line that I don't want to use. My home is paid off. My question is received an offer for a personal loan with Capital One at 7.99 interest. I
know I can't take this as a tax deduction at the end of the year,where I can with the equity line. I guess I like the fact that the personal loan is unsecure, just based on my good credit history. Please advise what you think would be the best option. Sorry for the long post.
iVillage Member
Registered: 04-02-2007
Tue, 04-03-2007 - 9:51am
I woudn't do it unless it was all going to cover my credit card and the interest is cheaper and not compound on your personal loan, then it would make sense to take that and pay off the credit card with the loan. It could be a really big mess if you took the loan, paid off some of the credit card and then spent the remainder of the loan.
iVillage Member
Registered: 01-25-2006
Tue, 04-03-2007 - 11:54am

I agree that it depends on the current interest rate that you have on the debt and whether they are going to be able to roll the entire $15k over there. Are there closing/transfer costs? I personally would be very tempted to use the equity line since you have the entire worth of the house available but totally understand and support your desire to avoid securing the debt when you can leave it unsecured. What is the rate on the HELOC? If it is substantially better than the 7.99 then with the tax deduction it would be even bigger difference so that might play into my decision too.

Not too much in the way of definite advice. Also, you might want to repost this in its own thread if you don't hear from many people. I thought this was some sort of iVillage post and I don't always read those.

Peg

iVillage Member
Registered: 03-17-2003
Tue, 04-03-2007 - 12:21pm
A good rule of thumb is to not transfer your consumer debt to your home.
iVillage Member
Registered: 04-03-2007
Tue, 04-03-2007 - 1:15pm
Thank you all for your advise. Sorry about the thread title, didn't know first time i post.
iVillage Member
Registered: 07-08-2004
Tue, 04-03-2007 - 1:25pm
Keeping in mind the advice from the other posters, I would consider a "cash-out" mortgage, since you own your home outright. You will get a lower interest rate than a heloc, and you won't be able to charge it back up. However, there would be closing costs involved unless you can find a special deal. ING did a no closing costs offer for a while, but that's over now. If there are no up-front costs associated with your HELOC, then you may want to do some calculations to see which would save you more money - a lower interest rate or zero start-up costs.