Ask Terry Questions Pay off home equity loan

Pay off home equity loan

By Terry Savage on March 29, 2024 | Credit/Debt

What are your recommenations for paying off a home equity loan? Amount of loan is not going down due to increase in the interest rate. Only paying mostly interest each month. Considering using a withdrawal from an inherited IRA? No penalty, have to pay tax, lose future gains in that account. Another option I am considering, is a 0% balance transfer credit card offer. Understand the need to pay off before the 0% ends. How can I find out the max amount a credit card would allow on a transfer, or do I have to apply first to find out? Thank you.

Terry Says

Well, you certainly understand your options. Now consider the interest rates on those alternatives. Using the IRA, you give up growth– but get out from under the loan.
Balance transfer just creates another “future obligation” that could put you under pressure– same as the expiration of the home equity loan.
So I’d use the inherited IRA –pay it off,and never go down that road again!



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