Is taking out a home equity line of credit (HELOC) a smart way to pay off debt?

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Drawbacks of HELOCs

One of the biggest downsides to a HELOC is having to deal with monthly payments, which have to be paid on top of your existing mortgage. In addition, the rates on a HELOC aren’t fixed, meaning monthly payments can increase or decrease depending on how much you’re borrowing and the federal funds rate. Keeping up with these payments can add uncertainty to your budget, and if you’re using a HELOC to pay down rising credit card debt, you’re simply trading one type of debt for another instead of working toward becoming debt-free.