Rocket Mortgage launched a nationwide advertising campaign in early August, positioning home equity loans as a solution to high credit card debt. The company pointed out that interest rates for home equity loans and home equity lines of credit (HELOCs) are typically lower than those for credit cards (with an average rate of 23.80% in August), while the average interest rate for home equity loans was 8.10% and for HELOCs was 7.31% as of August 19.
However, analyses warn that while interest rates are lower, home equity loans are secured debt collateralized by the home. If borrowers cannot repay, they risk losing their home. A survey revealed that over half (53%) of U.S. consumers carry credit card debt to cover rising essential living expenses, and nearly half (48%) of respondents stated they could not further cut back on bills and utility spending. Therefore, converting unsecured debt into secured debt, especially when used to cover recurring essential expenses, carries higher risks.
Rocket Mortgage promotes home equity loans to help customers pay off credit card debt, but analysis points out that this move may pose risks to homeowners.
Source:Yahoo财经 · Source Link
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