Unsecured lines of credit and personal loans usually cost less than credit cards, but more than a mortgage. Whether to consolidate them depends on the rate gap and your plan.

Unsecured lines of credit

  • Often variable rates, higher than mortgage rates
  • Interest-only minimums are common, so balances can linger
  • After consolidating, the line stays open unless you close it, which is easy to reuse

Personal loans

  • Fixed payments and an end date, which is good discipline
  • Check for an early payout penalty
  • If the rate is reasonable and the end date is near, leaving it may be fine

How to decide

  1. Compare each debt’s rate with the new mortgage rate.
  2. Include any payout penalty.
  3. Consider how much it affects your debt ratios.
  4. Consolidate the ones where the savings are clear. See which debts.

After paying off a line of credit

Ask the lender to close it, or reduce the limit, unless you have a clear reason to keep it. See your paid-off cards.

This article is general information, not financial or legal advice. Lender requirements, rates and fees change and depend on your situation.