How a HELOC works for debt consolidation
A home equity line of credit lets you borrow against your home equity, the difference between your home’s value and what you still owe on your mortgage. You can draw, or borrow, only what you need from an approved credit limit. That money can be used in a variety of smart ways, including debt elimination. Switching to a HELOC could mean you go from juggling multiple due dates to a single monthly payment. With HawaiiUSA’s standard interest-only HELOC, you can make interest-only payments on the amount borrowed for the first 10 years, followed by up to 20 years to repay the balance.
HELOC rates vs. credit card rates
Credit cards typically carry higher interest rates than secured borrowing options like HELOCs. According to the Federal Reserve, the average annual percentage rate on credit card accounts assessed interest was 22.15 percent in May 2026. Because a HELOC is secured by your home, its rate may be lower than unsecured credit card rates, depending on your credit profile, loan terms, and market conditions.
Both HELOCs and credit cards can have variable interest rates, but a lower HELOC rate may reduce interest costs depending on the amount borrowed, repayment timeline, and future rate changes.
For example, HawaiiUSA’s standard interest-only HELOC starts with a fixed rate for a set period. After that period, the rate may rise or fall as market rates change. Your actual rate and total borrowing cost will depend on your loan terms, credit profile, outstanding balance, and changes to any variable rate.
How much home equity you can borrow
Your available equity may let you borrow enough funds to eliminate existing debt. HawaiiUSA’s standard interest-only HELOC lets qualified borrowers access up to 80 percent of their home’s value, minus mortgage balances, with lines starting at $10,000. Let’s say Betty Borrower purchased her home a decade ago and has been chipping away at her mortgage ever since, so she has plenty of equity to work with. Her neighbor, Penny Saver, moved in last year with a small down payment and may have less equity to borrow against.
Betty and Penny each have three credit card balances they’d like to get under control before the holidays. They can use the consolidating debt with home equity calculator to estimate potential savings based on their individual situations, and so can you.
When a HELOC for debt consolidation makes sense
A HELOC may be worth considering as a debt consolidation tool when:
• Your projected HELOC rate, including any variable-rate period after an introductory fixed rate, is lower than the rates on your credit cards.
• Your income can comfortably cover your mortgage payment, your HELOC payment during both the interest-only and repayment periods, and your other essential expenses.
• You can pay more than the required interest-only payment during the first 10 years if your HELOC includes an interest-only period.
• You have a plan to avoid rebuilding balances on the credit cards you just paid off.
Other considerations before you apply
If you regularly spend more than you earn, a lower interest rate alone will not solve the problem. HawaiiUSA members have access to private, no-cost financial coaching sessions that can help you create a realistic household budget and savings plan.
Applying this fall may give you time to establish your line before holiday shopping kicks into full swing. Your lender needs time to review your application, verify your financial information, evaluate your home’s value, and complete the closing process. Your credit card issuers may also need time to process and post the payments. Speak with a HawaiiUSA representative today to discuss whether a HELOC fits your debt management plans and budget.
