Why use a home equity loan
Credit cards and personal loans often carry much higher rates than loans secured by a home. A home equity loan gives you a lump sum at a fixed rate, which you can use to pay off those balances.
Unlike a cash-out refinance, it doesn't replace your first mortgage. If your current mortgage rate is low, that's a big advantage.
You also get a set payoff date. Card balances can linger for years when you pay only the minimum, but a fixed loan ends on schedule.
What to consolidate
Focus on the debts with the highest rates. Low-rate debt, like some auto loans, may not be worth moving, especially if it's nearly paid off.
- Credit card balances
- Personal loans
- Medical bills on payment plans
- Other high-rate debt
A before-and-after example
Hypothetical example. APR may differ; example only. Rates change daily.
- Before: four payments totaling $1,250 a month, at rates from 9% to 24%
- After: one $75,000 home equity loan at 8% for 15 years, about $717 a month
Example details: $75,000 15-year fixed home equity loan at 8.000% (8.055% APR): 180 monthly payments of $716.74. Principal and interest only; taxes and insurance not included, so the actual payment will be higher. Unless noted, APR assumes ZERO Closing Costs, no discount points and 15 days of prepaid interest. Hypothetical example prepared November 4, 2026, not a current CapCenter rate offer; subject to credit approval.
Check the total cost
A lower monthly payment can still cost more over time if the term is long. Stretching short-term debt over 15 to 30 years can add interest, even at a lower rate. Choose the shortest term you can comfortably afford, and pay extra when you can.
Compare your current total monthly payments and remaining interest with the new loan's payment and total interest.
Know the risks
Credit card debt is unsecured. A home equity loan is secured by your home. If you can't make the payments, you could lose the home. Consolidating also frees up your cards, so it helps to have a plan to avoid running the balances back up.
- Keep paid-off cards open but set aside, if that helps your score and your discipline
- Build a small emergency fund so new costs don't land on a card
- Track the new payment in your budget from day one
CapCenter home equity loans
CapCenter offers fixed-rate home equity loans from $50,000 to $250,000, with 15, 20 or 30-year terms, on single-family primary residences and second homes. They come with ZERO Closing Costs (restrictions apply). You need a credit score of at least 620 for a CapCenter loan.
