Skip To Content

Three Reasons to Consolidate Debt With ESL Home Equity Solutions

When it comes to financing the expenses of life, there are plenty of solutions that help people reach personal and professional goals.

Between credit cards, personal loans, and education loans, most people have some debt. And that’s not necessarily a bad thing—if you know how to manage it.

If you’re a qualified homeowner, you can use your home’s equity to do just that. The increased value of your home allows you to borrow money at potentially lower interest rates than other financing options.

This means that when you consolidate your higher-interest rate debt with ESL Home Equity Solutions, you could simplify your payments and save money to help pay off balances faster.

On the fence? Here are some benefits to consider around using home equity to streamline your finances.

1. One Streamlined Payment

This might go without saying, but managing fewer bills is easier. It can be hard to remember when multiple payments are due throughout the month. And, consider what happens if you miss a payment: you may incur late fees and impact your credit score.

There’s a smarter, easier way. You can use your home equity to consolidate all your bills into one monthly payment. When you only have one due date to remember each month, it’s easier to plan your payments and make them on time.

2. Competitive Lower Rates

Using your home equity typically allows you to access lower interest rates than other financing options.

For example, say you apply for a Home Equity Line of Credit and get approval for $15,000 at an interest rate of 9.00% for 7 years/84 months. To pay off a $15,000 Home Equity Line of Credit over 7 years you would have to pay $241.34 each month. Compare this with a higher-interest rate credit card, you have the potential to save $102.58 each month and over $8,500 in interest paid over the same 7-year repayment period.

Home Equity Line of Credit Savings Comparison Chart1

  Amount Owed Interest Rate* Monthly Payment
(principal and interest)
Time to Payoff Interest Paid
Credit Card $15,000 21.19% $343.92 7 Years/84 Months $13,889.59
HELOC (80% LTV) $15,000 9.00% $241.34 7 Years/84 Months $5,272.24
Savings     $102.58   $8,617.35

When you consolidate your debt under an ESL Home Equity Loan, your monthly rate will be fixed, so your payment will stay the same. Meanwhile, an ESL Home Equity Line of Credit is a flexible and accessible option where you only pay interest on what you use.

Learn more about the differences between a Home Equity Loan and a Home Equity Line of credit here.

3. No Closing Costs or Annual Fees

It’s a good idea to consider the pros and cons before using your home equity to consolidate debt. When calculating how much you could save, you would normally consider additional expenses like annual fees or closing costs, which might include origination fees, home appraisal fees or credit report fees.

Luckily, with ESL Home Equity Solutions those additional expenses aren’t a problem. With no closing costs or annual fees, your savings calculations just got simpler.

What’s Best for You

Using your home’s equity to consolidate balances can be a good way to streamline your financial life. If you’re considering this option, we recommend doing your research to understand more about the different types of ESL Home Equity Solutions.

1: Source: Board of Governors of the Federal Reserve System (US), Commercial Bank Interest Rate on Credit Card Plans, All Accounts [TERMCBCCALLNS], retrieved from FRED, Federal Reserve Bank of St. Louis;, October 13, 2023

2: Annual Percentage Rate (APR) shown as of 10/31/23 and is subject to change without notice. The contract rate is based on Prime Rate plus your contract margin and may vary monthly but never exceed 15.9%. The Prime Rate was [current prime rate] as of [current prime rate date] and rate featured is based on a loan-to-value ratio up to 80%. There are other rates available for loan-to-value exceeding 80%. Minimum line amount is $5,000. Offers are for new accounts only and subject to credit approval. Actual rates may vary.