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Veteran Services: Finance Questions

Finances

You're working, and you've got a family that depends on you - both now and down the road. Where do you invest your money? Do you borrow against the equity in your house? Through a preferred provider relationship with USAA, The American Legion can provide expert financial advice to just about any question.

Questions & Answers

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Financial Questions & Answers

Question:

We own our own home, and we are interested in a low interest loan to pay off some debts at a reasonable rate. Do you have any ideas? - Jack

Answer:

Consolidating debts into a single loan can make it easier to get rid of that debt and possibly offer a lower interest rate option. However, we always start the conversation regarding consolidation with a question: have you addressed the underlying cause that resulted in the debt? Sometimes, a "one-off" healthcare event or other incident results in debt. On the other hand, debt can also be the result of living beyond your means, spending more than you have coming in. If you accumulated debt because of overspending, consolidation can do more harm than good if you don’t address the spending issue.

This is especially true if you decide to use the equity in your home to consolidate your other debt. Imagine putting your house on the line by tapping a home equity loan only to find yourself a year or two down the road with both the home equity loan and a pile of other debt that’s been accrued since consolidation. That’s not a good scenario, but it’s one we’ve seen play out before.