Unlock a HELOC for Debt Consolidation

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Posted by Administrator at 06/15/2023

If managing your monthly finances is too much to keep up with, debt consolidation might bring you peace of mind, as well as a few other perks. If you own your home, you might want to consider tapping into the equity you’ve built up to set up a line of credit.

A Home Equity Line of Credit is known as a HELOC. At PSECU, we offer a traditional HELOC and a HELOC Plus. We’ll get into the specifics about each, but first, here’s a quick look at how consolidating debt can help you:

Save money: High interest rates on credit cards and payday (short-term) loans can make getting out of debt feel impossible. Debt consolidation often offers a considerably lower interest rate. In the long run, you’ll put more of your money into repaying debt – not paying interest.

Simplify budgets: Juggling multiple due dates and invoices can create stress and increases the likelihood that you are either late with or miss a payment. With on-time payments being so important in credit scoring, you want to stay on top of your bills. Predictability of one payment and one due date makes budget planning so much easier.

How Does a HELOC Work?

If you’ve paid down the balance on your mortgage below the home’s value, the difference is your equity. When you open a line of credit, you borrow money up to your approved credit limit. Then you pay back only what you’ve borrowed plus interest. Specifics of HELOC programs vary by lender.

At PSECU, we offer a variable-rate HELOC and a HELOC Plus that offers a fixed-rate and a variable-rate advance feature. With our HELOC product, the minimum credit line is $5,000. The minimum amount you can advance at one time is also $5,000. Learn more about our HELOC.

The HELOC Plus also has a $5,000 minimum line of credit. If you choose a fixed-rate advance, the minimum amount per advance is $5,000, with a limit of three outstanding fixed-rate HELOC Plus balances. There is no minimum advance amount for the variable-rate feature of our HELOC Plus.

If you’re looking to consolidate debt totaling more than $5,000, you might want to consider either our HELOC or the fixed-rate advance feature of our HELOC Plus. Regardless of the type of HELOC product you choose, you need to be certain you can handle the repayment because if you default, you could lose your home.

When comparing HELOCs offered by other financial institutions, be sure you compare not just the rate but other factors, too. Do they charge application or appraisal fees? We don’t! That’s because we want you to keep more of your money where it belongs – with you. Not a member? We’d love to show you what better banking looks like. Apply today!