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Debt & Credit Help

How To Use Home Equity to Pay Off Credit Card Debt (Plus 7 Options You Haven’t Considered)

Paying off debt is easier than you think if you have the right plan.

Last updated July 16, 2026 | By FinanceBuzz Editors

Need to pay off a credit card or fund a big purchase like a home renovation? A HELOC (Home Equity Line of Credit) allows you to borrow against the equity in your home, typically up to 85% of your home's value, minus any outstanding mortgage balance.

For example: Suppose you need to pay off $20,000 on your credit card at an 18% interest rate. If you have $50,000 in home equity, you might get a HELOC with a 9% interest rate. By using the HELOC to pay off your credit card, you reduce your interest payments significantly, making it easier to pay down the principal.

HELOCs aren't for everyone, though. If it doesn't sound like the right choice for you, there are other options available, including Home Equity Agreements, financial relief help, incredible credit card welcome offers, and more. Take a look at the list below from our partners and find the solution that's right for you: 

Borrow cash from your home (without touching your mortgage)

If you need cash, you do not need a cash-out refinance or home equity loan — get a HELOC instead. The Fed just cut interest rates, and a HELOC could help you take advantage of it without touching your mortgage.

Use LendingTree’s simple HELOC matching tool1to compare rates and see what works for you.

How a home equity line of credit is different: Your line of credit acts similar to a credit card during what’s called the “draw period,” which is usually 10 years. You can withdraw funds when you need them, and you’re only responsible for monthly payments toward the outstanding balance. After the draw period ends, you pay off the outstanding balance during the remaining term or “repayment period,” which can be up to 20 years.

The best part? HELOCs usually have variable interest rates, meaning you could access cash now at newly lowered rates and have the opportunity to access more down the road at potentially even lower rates.

To get started:

  1. Check out LendingTree’s HELOC matching tool.
  2. Answer a few questions.
  3. Be matched with personalized offers for you.

See how much cash you could get

Stop getting ripped off by credit card companies

If you have credit card debt, you know that paying your bill each month is anxiety-inducing … and sometimes close to impossible with what you have in the bank.

If that’s you, a company called LendingTree1wants to help.They can match you with loan providers that could help you pay off your debt quickly.

Think about it this way: For example, $30,000 in credit card debt at 25% APR will cost you $622.60 every single month in interest alone. But, with a rate as low as 6.50% APR (possible through LendingTree’s lenders), you’d only pay $160.69 interest.

That’s over $460 a month you’d get to keep for yourself in this scenario! Even better, you don’t need a perfect credit score, and checking for loans won’t affect your credit.

Truthfully, this company exists to help you get ahead in life. They have a 4.5/5 rating on TrustPilot with more than 15,000 verified reviews, and you can see your options in a matter of minutes. It’s certainly worth a shot if you’re feeling suffocated by debt.

See if your $30K+ credit card debt is eligible for options with LendingTree

Pay no interest into 2028 with this no annual fee card

If you're struggling to pay down high interest debt (or you're planning a major purchase this year), this might be the exact thing you need. There's a card that allows you to completely pause credit card interest into 2028 ... and the best part is that it could be easier than you think.  

BankAmericard® credit card is an extremely powerful card that gives you 0% intro APR for an astounding 21 billing cycles on purchases and balance transfers. (Then APR is 14.99% - 25.99% Variable.) That's right — you could finance large purchases you've been sitting on without paying massive interest. Or, transfer crippling high interest debt to this card and let your payments go directly to paying down your balance, without piling on additional interest charges. 

And here's what makes it even better — there's no annual fee. So every dollar you're saving on interest stays right where it belongs: in your pocket. If you've been waiting for the right moment to tackle your debt or pull the trigger on a big purchase, this card is hard to beat.

Apply now for the BankAmericard® credit card 

See if your credit card debt is eligible for this debt relief program

If you have a lot of debt, getting rid of it can feel stressful (and nearly impossible). Here’s the problem: the longer you put off tackling it, the harder it may get to fix. If you don’t take control of it early on, it can add undue stress to your life for years. But what if there was a way to get rid of unsecured debt?

Freedom Debt Relief could help. If you have more than $30,000 in debt from credit cards, medical bills, collections, or personal loans, their certified debt specialists may be able to help you resolve your debt for less than you owe — with one affordable monthly deposit.

Best of all? There are zero upfront settlement fees, and you could reduce debt in as little as 24-48 months2. To get started, just answer a few simple questions and get connected with a Certified Debt Consultant. It only takes a few minutes to see if you qualify, and the consultation is completely free!

See if your $30k+ in credit card debt is eligible for Freedom Debt Relief

Did You Know?

On average, debt settlement saves clients around 32% of their enrolled debt after fees, according to a 2023 study by the Association for Consumer Debt Relief. The consultation costs nothing. People who enroll and complete the program could reduce debt in as little as 24 to 48 months.

Sources: Association for Consumer Debt Relief (2023)

Get $15,000-$500,000 from your home (no monthly payments)

This is really cool. If you own a home and want to take equity out (to pay down debt or fund home renovations, for example) you can — but usually, you have to make payments each month. This company gets rid of that.

It sounds crazy, but it's called Unlock, and it lets you take money out of your home right now without making monthly payments. It's called a Home Equity Agreement (HEA), which is a partnership between you and Unlock where you get money now in return for a portion of your home's future appreciation in value.

Unlock can give you access to $15,000–$500,000, but you can take what you need based on what you qualify for.3You can also leave the partnership at any time by buying them out or selling your home. To get started, go to their website, enter your address, and see how much you could qualify for in two minutes. It's incredible.

Complete the form here and get your instant cash estimate

Pay no interest into 2027 with this no annual fee card

If you're struggling to pay down high interest debt (or you're planning a major purchase this year), this might be the exact thing you need. There's a card that allows you to pause credit card interest into 2027 ... and the best part is that it could be easier than you think.  

Discover it® Cash Back (Rates and fees) is an extremely powerful card that gives you 0% intro APR for an astounding 15 months on purchases and balance transfers. (Then APR is 17.49% - 26.49% (Variable); Balance transfer fee applies.) That's right — you can now finance large purchases you've been sitting on without paying massive interest. Or, transfer crippling high interest debt to this card and let your payments go directly to paying down your balance, without piling on additional interest charges — all with no annual fee.

But it doesn't end there. The Discover it® Cash Back card also lets you earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, Discover will match all the cash back you’ve earned at the end of your first year. 

Apply now for the Discover it® Cash Back card

Save $28,000 over the life of your mortgage

Too many buyers overpay on their mortgage without even knowing it. Rates and fees vary wildly from lender to lender, but nobody has time to call around and compare, so they might just accept the first offer and hope for the best. Now there's a free service that does the hard part for you.

It's called Own Up, and it compares mortgage offers from a network of top-rated lenders so they compete for your business and you can pick a great deal.4You fill out a quick 5-minute profile (no hard credit pull),5get matched with top-rated lenders, and see the comparison side by side.6

Thnk about it this way: On a $400,000 mortgage at 7.00%, you'd pay over $558,000 in interest over 30 years. Drop that rate just half a percent to 6.50% and you'd pay around $510,000. That's $48,000 back in your pocket, just from shopping around for a better rate.7

Own Up customers save on average $28,000 over the life of their loan,8and it costs you absoloutely nothing to find out what you'd save.

Own Up is 100% free — there’s no direct consumer fee for Own Up’s service. Own Up is compensated by lenders, not consumers. See what you could qualify for at the link below before you lock in a rate you might regret.

Check your rate in 5 minutes (free)

Ask this company to pay off your late tax debt

Past-due tax debt is overwhelming. It weighs on your mind and causes massive anxiety. You end up emotionally and physically drained. Even worse when the IRS starts sending letters threatening wage garnishment and huge fines.

Guardian Tax is designed specifically to help you get out of tax debt faster and could even eliminate or reduce some of the debt you owe. While most tax companies just put you on a payment plan and file your taxes for you, they talk to the IRS directly, and could help you pay off your tax debt faster while potentially reducing what you owe.

Guardian Tax is BBB accredited, and as long as you can afford a simple monthly payment associated with your debt each month, they could help you eliminate it faster than you thought possible!

Important: Not everyone will qualify. To take advantage of this special program you must owe more than $10,000 in past-due taxes.

Fill out this form to get started

Turn Home Equity Into Cash
Rocket Mortgage
4.7
info
Rocket Mortgage Benefits
  • Get a cash-out refinance to access cash without a HELOC or second mortgage9
  • Use the money to consolidate high-interest debt
  • Might impact your monthly mortgage payment less than you think
  • Use the simple calculator to estimate what you could get out of your home
  • Great option for those with a 680+ credit score
See how much cash you could get

Frequently Asked Questions

What is home equity?

Home equity is the difference between the value of a home and the amount of money still outstanding on the mortgage. In other words, it’s essentially the portion of the home that is owed outright. This value can be expressed as a percentage or dollar amount. For example, a home valued at $400,000 with $100,000 remaining in mortgage payments has $300,000 or 75% worth of equity.

Some lenders may require a full appraisal to determine a home's value. However, automated valuation models, which consider local property values and recent home sales, are more common.

Visit Rocket Mortgage

How can I utilize my home equity?

Home equity is one of the greatest financial benefits of owning a home. You can tap into the equity you built for multiple reasons, including:

  • Debt consolidation: Pay off multiple other types of debt with your home equity loan or line of credit to keep your debt organized and potentially get a low interest rate.
  • Home renovations: Use your home equity to help pay for important home renovations and improvements, which can in turn increase your home value.
  • Medical bills and emergencies: Cover costly medical bills or other unexpected expenses by tapping into your home equity.
  • Large purchases: Use your home equity to cover large expenses involved with weddings, buying a new car, or moving houses.

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What are the different types of home equity products?

The most common way to access your home equity is a home equity loan or home equity line of credit (HELOC). There are a few other products as well, so let’s quickly break them down.

Home equity loan

A home equity loan is a type of second mortgage that’s granted based on the equity you currently have in your home. You’ll be limited to borrowing up to 85% of that equity value, with other factors such as your credit score and debt-to-income ratio also impacting the final loan amount.

You’ll receive your loan in one lump sum and will make monthly payments, typically at a fixed interest rate.

Pros

  • Consistent monthly payments at a fixed interest rate.
  • Relatively lower interest rates compared to personal loans or credit cards.
  • Typically have repayment periods, spanning up to 30 years.
  • If you use your loan for home improvements or repairs, your home equity loan interest payments may be tax-deductible.

Cons

  • Your home is collateral, so if you don’t repay the loan, you could face foreclosure.
  • You typically need at least 20% equity in your home to qualify for a home equity loan.
  • You’ll need to pay closing costs, with are often around 1% of the total loan.
  • It can take a month or longer to access your loan funds.

HELOC

Unlike a home equity loan, HELOCs work more like a credit card — as a revolving line of credit (with an approved credit limit) that you repay based on what you spend. Although some home equity loans have fixed interest rates, most HELOCs will have variable ones — meaning you might pay more or less interest on your borrowed amounts over the life of the loan.

HELOCs are split into two periods: the draw period and the repayment period. During the draw period, you can access funds anytime you need them. Typically, you’ll only need to pay interest on borrowed amounts during this time. Once you enter the repayment period, you can no longer borrow cash, and you’ll need to make regular payments on both the principal and interest.

The value of your HELOC likely won’t exceed 85% of your home’s equity, and approval will depend on your overall creditworthiness.

Pros

  • Only need to repay what you borrowed (similar to a credit card) and not the full approved amount.
  • Flexibility of accessing funds when you need it, sometimes in the form of debit cards, checks, ATM withdrawals, or online transfers.
  • Ability to access funds up to 10 years (the draw period) before entering the repayment period (typically 20 years).
  • Making regular payments could help boost your credit score.

Cons

  • Rates are often variable, so even if rates are low when you take out a HELOC, they could be higher when it comes time to repay.
  • Because you can access funds at any time and aren’t on a strict payment schedule during the draw period, it can be easy to run up a high balance.
  • You could have to pay additional fees, such as an early cancellation fee, an inactivity fee, or a withdrawal fee.
  • A HELOC borrows against your home equity, which can deplete your net worth and limit additional opportunities to borrow funds.

Home equity agreement (HEA)

A home equity agreement is a contract between a homeowner and an investment company that allows the homeowner to access funds from their home equity without taking out a loan. In exchange for a percentage of future equity, the homeowner receives a lump sum of cash.

The benefit of this agreement is that you don’t have to make monthly payments or account for accruing interest. Instead, you’ll need to repay the investor the principal plus the agreed-upon percentage of the home’s appreciation within a certain time period (typically between 10 and 30 years). If you sell your home within that timeframe, the investor will instead receive a portion of the home sale.

Pros

  • Access to a lump sum of cash quickly.
  • No monthly payments and no interest accrual.
  • Typically lower credit scores are accepted compared to home equity loans or HELOCs.
  • The lump sum payment is usually not taxable as income.

Cons

  • You are giving up some of the profit (equity) when it comes time to sell your home.
  • Repayments aren’t monthly, so you’ll owe a large sum by the end of the term.
  • If you aren’t able to pay what you owe, you may be forced to sell your home.
  • Your home’s value may skyrocket, increasing the amount owed at repayment.

Home equity investment (HEI)

Similar to a HEA, a home equity investment allows you to access cash from your home equity without a loan. The key difference between a HEA and a HEI comes down to the repayment process. While a HEA repayment is based on the home’s future total value, a HEI is based on the future change in value.

In other words, if your home value increases significantly when it comes time to pay off your HEI, you could be looking to pay quite a bit more than you originally received. Some HEI lenders offer a protection cap, establishing the maximum amount you need to repay regardless of home value increase. Conversely, if your home value decreases, some HEI lenders will share in the loss.

Pros

  • Most HEI companies do not take debt-to-income into consideration for approval.
  • One lump sum with no restrictions on how you can use the funds.
  • No monthly payments and a long repayment term, up to 30 years.
  • Secondary properties may qualify for a HEI as well.

Cons

  • Will need to repay the investment either when you sell the home or with a cash-out refinance.
  • Restrictions on location and property types that can qualify for a HEI.
  • Since the cost is tied to the value of your home, you won’t know exactly how much you’ll need to repay.
  • Risk of foreclosure if you are unable to repay your HEI.

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How much money can I access with my home equity?

When it comes to a home equity loan or HELOC, lenders can use different formulas to calculate how much you can borrow. The various factors taken into consideration include your creditworthiness, existing debt, your perceived ability to repay the loan, the appraised value of your home, and the loan-to-value ratio (LTV).

In general, the higher the amount of equity you have in your home, the bigger the loan amount you could receive.

With HEAs and HEIs, the current value of your home and your available equity are two large considerations. Since these companies benefit from an increase in your home’s value, some may apply a reduction to the appraised value to adjust for risks. 

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