On my daily coffee-and-Reddit-scroll session, I came across a post from eight months ago under the r/personal finance subreddit. It’s entitled, Home Equity Loan to Pay Off CC Debt???

The OP (Original Poster), Rayalah, is trying to pay off debt. OP says that they have about $45,000 in credit card debt. They said that they make more than the minimum payments and could use the snowball method, but that will take around 4.5 years and she will have to pay $17,000 in interest. Rayalah is considering taking out a personal or HELOC (Home Equity Loan) to pay it off all at once. They say that their salary is $136,000 annually and they have a credit score of 730.

Insights From the Comments

Through the comments, some additional comments came out OP hasn’t looked into a specific loan, or gotten an offer but they did break down their specific debt and monthly expenses. OP’s debt is distributed across 12 high-interest-rate credit cards, some stores, and some credit card companies. The interest rates range from 16.5%-31.99% (and one Citi Diamond card with 0% interest rate). OP’s monthly minimum credit card payments total about $1,276 per month.

Other monthly payments include housing/insurance/utilities at $4,200, student loans at $461, car payments at $301, and streaming/subscriptions at $86. OP states that their husband’s monthly salary mostly covers those costs. OP says that they feel overwhelmed with all the monthly payments, and their household income is higher now, and the household is no longer reliant on credit cards to survive. OP’s goal is to pay off the debt the “right way” and as quickly as possible.

Since I am by no means a financial expert, I flew to the comments to see some opinions that commenters were giving. Here are the key takeaways I found:

Key Takeaway/Lessons

Look at where the rest of the spending is going, and establish and stick to a budget. Most commenters with this opinion say that with OP’s income, using the snowball method in 4.5 years would be extremely easy, and they think OP could do it faster if they were able to pay more than the minimum. OP states that they live below their means, but don’t have a strict budget or stringent spending tracking. Most advise OP to establish that and speed up the snowball timeline.

Another opinion is that, since OP does have one credit card with a 0% interest rate, they should pay off as much as they can with that card to take off the pressure of paying multiple cards. Especially when putting the highest interest balances on that card.

There are no commenters who think OP should take out a Home Equity Loan to pay off her credit card debt. One commenter said, “Letting go of your equity within your home would leave you with a depleted asset. By paying off the credit card debt you won’t have any debt, but by doing a cash-out refinance you would still have an ongoing loan.

Financial Suggestions

One commenter was a bot moderator who supplied links on how to pay off debt. The link went to a Q&A on the r/personalfinance and one section talks about the two best methods to pay down debt, and how to reduce an interest rate.

There are two methods, the avalanche method, where debts are paid down in order of interest rate, starting with the highest. It is the optimal method. The other method, as previously mentioned is the snowball method which pays down debts in order of balance size and then continues paying that same monthly payment for the smaller balances until they are all gone.

Some suggestions for reducing your interest rates are to call and try to negotiate the rate with the credit card company. However, always paying your credit card bills “in full, every month, no exceptions,” gives you an effective interest rate of 0% (that last part isn’t particularly applicable to this situation). You can also try to lower your debt amount by calling and negotiating. Sometimes with medical debts and other debts, institutions would rather have less money all at once, than a small payback paid back over years.

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