"Should I Use A Home Equity Loan to Pay Off My Debt?"

Should I use a Home Equity Loan to pay off my debt?

Here's a quick exercise in determining whether this move makes financial sense...

You'll need a sheet of paper (or two), a pen (or pencil), a calculator (if you don't have one, it's basic math anyway), and the invoices/stubs for your monthly bills (if you pay them online, log onto your bank's website and print your set of monthly bills and the payments due).

The Exercise:

• Go through each of your bills and write a list that includes the name of the card, the monthly payment due for each account along with the total balance due right next to it. You want to go down this list and tally the totals.
  

For example:

• Go through each of your bills and write a list that includes the name of the card, the monthly payment due for each account along with the total balance due right next to it. You want to go down this list and tally the totals.
  

For example:
Macy's Credit Card                                          $45.50             $800
Bank of America Credit Card                             $145.45          $3,000
Best Buy Credit Card                                       $112.99          $2,500
American Express Credit Card                            $179.75          $7,000
Target Credit Card                                            $35                $400
Banana Republic Credit Card                               $65                 $700
Credit Union Credit Card                                  $185.00           $8,000
Medical Payments                                          $312.24          $14,500
       Total (Cash Outflow)                          $1,080.93         $36,900

Then what?

 

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