Here's Who We Are

We're Fund Virtually Everything

We fund business owners nationwide, regardless of industry, credit, or time in business. We fund it all.

Apply Now

We Provide Multiple Options

We have a lot of different financing options available to our clients. Regardless of your situation, we’ll have a solution for you.

Fast Approval

Our application process is completely online. You can get funds in your bank account in literally 24 hours.

The Working Capital You Need In 24 Hours.

We get you funding. It's that simple. Regardless of credit, income, or time in business - we'll fund you.


Use our online form or call toll-free anytime to get started. There's no cost, and the application takes only three minutes.


Receive application approval in as little as 24 hours. There is no credit check required.

Receive Funds

Review and return your signed agreement and get your money in as little as 24 hours.

Recent Business Loans Funded

100K Term Loan

Ambulance Service

Our client bought a new ambulance.
2019 - June
55K Advance

Truck Funded

Our client used the funds to hire new team members.
2019 - February
85K Term Loan

Restaurant Funded

Our client used the funds for restaurant equipment.
2019 - May

Get a Decision in as Little As 30 Seconds

We’re Fast. We Help Regardless of Credit. WE HAVE A SOLUTION FOR YOU.

Apply Online

We have a completely online application process, which is simple and easy.

Get Offers

We'll match you with the best loan offers we have that are financially responsible.

Get Funded Quickly

We'll fund you the same day you accept our offer.

How Delancey Street Works

Fill Out Our Application

Answer basic questions about yourself and fill out our entirely online application. Each loan has its own online process.

Meet Your Concierge

We'll pair you with an experienced Delancey Street specialist who will reach out to you, and understand your needs. We'll try to determine which financial product is right for you.

Compare Our Loan Offers

We give you a few different loan offers based on your scenario and what options you qualify for.

Choose Your Loan

Once you've chosen a loan that works for you, we finalize it and start getting the documents needed.

Get Funded

Once we get all of the documents back, we'll get you funded ASAP.

We Help You Grow

After you get funded, your Delancey Street concierge specialist will keep in touch to make sure you're happy and doing well.

Business Loans

Get business loans ranging from 3 months to 18 months
No credit score requirement, we have a program for everyone
We can fund up to $5 million in virtually 24 hours

Pros and Cons of Using a Home Equity Loan or Line of Credit to Pay Off Debt



Pros and Cons of Using a Home Equity Loan or Line of Credit to Pay Off Debt

Paying off debt can be a huge challenge, especially if you have high-interest credit cards or other loans. One option some homeowners consider is leveraging their home equity to consolidate debt into a new loan with a lower interest rate. This can be done through a home equity loan or home equity line of credit (HELOC). While this approach has some benefits, their are also risks to be aware of. This article will break down the key pros and cons so you can determine if its the right debt payoff strategy for your situation.

What is a Home Equity Loan or Line of Credit?

A home equity loan lets you borrow a lump sum of cash, up to a percentage of your home’s value, that you pay back with fixed monthly payments over a set repayment term. Rates are usually lower than credit cards or personal loans.

A HELOC also lets you access your equity, but instead of a lump sum you get a revolving credit line. You can draw from the line as needed, then make monthly payments on the balance. HELOC rates are variable but usually start lower than other debt options.

Pros of Using Home Equity to Pay Off Debt

Lower Interest Rates

This is the biggest benefit. Home equity loans and HELOCs typically have much lower interest rates compared to credit cards or personal loans. The current average rates are:

  • Credit cards – 18%
  • Personal loans – 10%
  • Home equity loans – 7%
  • HELOCs – 6%

Consolidating high-rate debts into a home equity product can reduce the total interest you pay over time, helping you pay off the debt faster. This chart shows potential savings over 5 years if you consolidated $20,000 of credit card debt at 18% into a home equity loan at 7%:

Debt Type Interest Paid
Credit Card $8,200
Home Equity Loan $4,800

Thats a potential savings of $3,400 just by getting a lower interest rate!

Pay Off Debt Faster

Because home equity loans have fixed monthly payments, it creates a plan to pay off your debt in a set timeframe, usually 5-30 years. This payoff schedule can motivate you and prevent the debt from lingering.

With HELOCs you’ll need self-discipline to pay more than the minimum each month. But the lower interest rate makes it easier to pay extra and pay off the balance faster.

Consolidate Multiple Debts

Rolling multiple debts into a home equity loan or HELOC can simplify your finances. You make one monthly payment instead of keeping track of several. Taking out a HELOC is often free as well.

Access Cash Quickly

Home equity loans fund in a lump sum you can use right away to pay off debts. HELOCs give you access to a revolving credit line to draw from as needed. This can be useful for managing unexpected expenses.

Potential Tax Benefits

The interest paid on home equity debt is usually tax deductible if you itemize deductions. This can provide some extra savings each year. Always consult a tax professional to understand how this could benefit you.

Cons of Using Home Equity to Pay Off Debt

Risk Losing Your Home

This is the biggest risk to understand. Home equity loans and HELOCs use your home as collateral. That means if you default on the loan your lender can foreclose and force a sale of your home to repay the debt. Be 100% sure you can afford the payments before borrowing.

Interest Rates Can Change

Home equity loans have fixed rates that won’t change. But HELOC rates are variable and tied to the Prime Rate, so if rates rise your payment would increase. Make sure your budget can handle potential rate hikes over the loan term.

Closing Costs and Fees

You’ll pay closing costs of 2% to 5% of the loan amount to take out a home equity loan. HELOCs have lower or no closing costs. Factor these fees into your total costs, as they can add up on a larger loan.

The Debt Remains

While consolidating debt can simplify payments, your total debt hasn’t changed. You still owe the same amount, just through a different product. Make a plan to pay more than the minimums so you can become debt free.

You Use Up Home Equity

Tapping equity reduces the amount of ownership stake you have in your home. This leaves you less equity to borrow against in the future if needed for other reasons. Only borrow what you need.

Discipline is Required

Having access to borrowed cash can lead some borrowers back into bad habits. Use your home equity loan or HELOC responsibly to pay off debts and don’t accumulate new debt.

Alternatives to Consider

Using home equity to consolidate debt has clear benefits, but also risks. Before choosing this option, also consider:

  • Balance transfer credit cards with 0% intro APR
  • Debt management plans through credit counseling agencies
  • Debt consolidation loans
  • Paying more than the minimums on current debts

Explore all your options to find the right debt payoff strategy for your situation. And make sure you address the root causes of your debt so you don’t end up in the same situation down the road. The key is developing healthy spending habits and living within your means.

In summary, tapping home equity can provide an affordable way to consolidate and pay off debt faster with lower interest rates. But make sure you go in with your eyes open to the risks and commit to using the funds responsibly. With the right planning, a home equity loan or HELOC can be a valuable part of your debt freedom journey.


Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

"Super fast, and super courteous, Delancey Street is amazing"
$125,000 Small Business Loan
"Thanks for funding me in literally 24 hours"
$35,000 Lawsuit Advance
"Great choice for first time fix and flippers"
$250,000 Hard money Loan

In The Media

Delancey Street CEO discusses ways to reward employees
Delancey Street CEO discusses the benefits of franchising on Forbes.
Delancey Street CEO discusses management on AMEX.
Get Out of Debt
Credit Card Debt Relief
Marital Debt Relief

Managing Marital Debt: Strategies for Financial Freedom Marriage can be…

Private Student Loan Debt Relief

Managing Private Student Loan Debt: Options for Relief Private student…

Veteran Debt Relief

Helping Veterans Find Financial Freedom Being a veteran comes with…

Delancey Street understands funding like no one else!
Steven Norris
Get Funding Today

Ready To Get Started?

If you have questions, feel free to shoot us an email, or fill out our live chat.

Apply Now