An equity loan can combine payments, but moving unsecured debt onto the home changes the risk and may extend repayment. Compare a complete payoff plan, not just the initial monthly relief, and address the budget issue that created the balances.
Inventory the debts before choosing the product
List each balance, actual rate, required payment, promotional end date, and expected payoff under a realistic payment plan. Separate recurring spending from a one-time expense. Include any debts you would keep after consolidation.
A lower required payment can reflect a much longer term. If balances are likely to return because spending still exceeds income, another loan may create both new mortgage debt and new unsecured balances. The CFPB also describes alternatives such as discussing terms with creditors and nonprofit credit counseling.
Compare keeping the first mortgage with replacing it
If the existing first mortgage has favorable terms, compare a separate home equity loan or HELOC with a cash-out refinance. Replacement pricing affects the full new mortgage balance.
For a line of credit, examine rate changes, draw requirements, and repayment-phase payments. A fixed amortizing second-loan illustration cannot predict those HELOC changes. Compare the draw and repayment risks before focusing on the initial payment.
Show the cost of stretching repayment
Record the new fees, debt amount, monthly obligation, and planned payoff date. Compare the balance remaining after several years against the debts you would otherwise repay. If you intend to keep paying the former combined amount, model that separately rather than assume it will happen.
Review collateral explicitly: failing to repay a home-secured loan can put the home at risk. A lower note rate is not enough to establish that converting unsecured debt into secured debt is appropriate for your situation.
Define what happens after the payoff
Create a monthly spending plan, decide how new card purchases will be handled, and retain a realistic reserve. Use sale or refinance assumptions cautiously. A hoped-for rate reduction is not the repayment strategy.
The equity calculator compares preserving the first mortgage with a fixed equity loan against replacement financing. It does not calculate the amortization of every credit card, decide whether consolidation is advisable, or provide tax or credit-counseling advice. Bring the full debt inventory for a broader comparison.
Payment relief can hide additional years of debt
A hypothetical $30,000 amortizing loan at 10% costs about $637.41 monthly over five years, or $38,244.68 in total payments. Over 15 years at the same rate, it costs about $322.38 monthly but $58,028.68 in total payments. Rounded payments and totals are calculated separately, with no fees or early payoff. The rate is illustrative, not pricing for a particular product.
Bring these details to a review
- Balances, rates, payments, and current payoff plans for every debt.
- New collateral, fees, interest structure, and repayment term.
- A budget that avoids rebuilding balances after consolidation.
Common questions
Does consolidation erase debt?
No. It moves or restructures the obligation and can add transaction costs.
Is equity-loan interest automatically tax deductible?
Do not assume so. Tax treatment depends on applicable law and use of proceeds; ask a qualified tax professional.
Continue with the relevant guides
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Sources checked October 28, 2026. Agency rules and a lender’s own product descriptions are different sources; lender examples do not establish availability through Aaron. Examples are original hypothetical illustrations, not client results. Actual eligibility, pricing, costs, and terms require review.