Should You Charge Home Repairs to a Consolidate Credit Card Debt?


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When you own a home, you are not only responsible for your monthly mortgage payments. You will also need to cover insurance costs, property taxes, maintenance and repairs.

However, repairs can be tedious. On the one hand consolidate credit card debt, they can be difficult to budget for. You can take your annual property tax bill and divide it by 12 to estimate how much money you need to set aside each month for this expense. However, repairs can be unpredictable and your regular salary may not be able to cover them consolidate credit card debt

If you are faced with a repair situation that you cannot pay directly and you do not have enough money to cover your costs, you might be tempted to put that expense on a credit card and reimburse it by more time. Here are some better solutions to explore.

1. A personal loan

The problem with credit cards is that they can charge exorbitant interest rates, making your debt more expensive to pay off. This is true even if you are eligible for a card with a 0% introductory APR, because if you are facing a huge repair there is a good chance that you have not paid it by the end of the period. introduction.

A personal loan can be a better bet. With a personal loan, you can borrow money for any purpose, and you will usually pay less interest than on a credit card. This is especially true if you have a good credit rating.

2. A home equity loan

A home equity loan, like a personal loan, allows you to borrow money for any reason, and you may be able to get a lower interest rate on a home equity loan than on a home equity loan. Personal loan. Plus, if your credit score isn’t at its best, a home equity loan might be a better bet.

Personal loans are unsecured, so lenders rely heavily on borrowers’ credit scores to determine eligibility and interest rates. Home equity loans, on the other hand, are guaranteed by the homes you borrow against. If you have a lot of equity in your home, you may find it easier to qualify for a home equity loan at a reasonable interest rate.

3. A home equity line of credit

A Home Equity Line of Credit, or HELOC, is similar to a Home Equity Loan, but instead of borrowing a lump sum, you have access to a line of credit that you can draw on for a predefined period of time ( usually five to 10 years). If you are unsure of the cost of your home repairs, a HELOC might be a good choice because it gives you the option of borrowing less or more.

To be clear, with a HELOC, you only earn interest on the amount you actually borrow. If you qualify for a $ 10,000 HELOC but borrow $ 6,000, you will not pay interest on the remaining $ 4,000.

Think twice before using a credit card to pay for home repairs

When a home repair happens out of the blue, it can be tempting to pull out a credit card to fix the problem with its payment. But remember, credit cards can charge a huge amount of interest, and too high a credit card balance can actually damage your score, making it harder to borrow money when you need it. .

You might think it makes sense to charge home repairs to a credit card because of the reward points or cash back you will get. But generally speaking, the interest you pay on this debt will far exceed the rewards or cash back you get. If you are forced to cover repairs to your home, it pays to look at a personal loan, home equity loan, or HELOC first and only use a credit card as a last resort.

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