Is this correct? Financial aid questions.

CollegeSoSoon_1
Thu, 24 Apr 2008 23:15:08 +0000

Thanks for all the replies. I think I get the general idea. A more specific question now. Given that a home equity loan is not free (costs and interest) does anyone have a guess as to the dollar amount of a “trade” (trading car and credit card debt for diminished home equity) it would take to be worth it? For example, if I were only going to take out a home equity loan for $5,000 and pay off that same amount in credit card debt, I can’t see that the diminished EFC would be worth the cost of the loan. But if I took $100,000 out of home equity, and paid off an equivalent amount of credit card debt, then I imagine our EFC would be reduced fairly substantially. The actual car loan and credit card debt is closer to $5,000 than to $100,000–I just picked those numbers because they seem easy to me. But at what point between $5,000 and $100,000 might it make sense to actually do this?