From Yahoo Finance: 2025-04-22 10:01:00

Debt consolidation can help lower interest rates by grouping all debts together, but it may not always be the best option. A Redditor considered consolidating $20,000 in credit card debt with a home equity loan, sparking debate among commenters who suggested focusing on paying off smaller debts first.

Some cautioned against using home equity loans to maintain bad spending habits, as the costs of origination fees and closing costs can hinder debt repayment. Correcting financial behaviors before considering consolidation is crucial. Waiting for interest rates to drop can be risky, as consolidating without addressing spending habits is not advisable.

Gambling on rate cuts and letting FOMO drive financial decisions may not be wise. One commenter warned against waiting for lower rates, as the possibility of rate hikes could lead to higher costs. Instead, assessing how one got into debt and finding a solution without refinancing or extending debt may be more beneficial.



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