To use loans to repay home loans effectively, consider refinancing your existing mortgage to secure a lower interest rate, consolidating high-interest debts into a single loan, or utilizing a home equity line of credit (HELOC). Refinancing replaces your current mortgage with a new one, potentially reducing monthly payments or shortening the loan term. Debt consolidation combines multiple loans into one, lowering interest rates and simplifying payments. A HELOC, tied to home equity, offers flexible borrowing for debt repayment.

Refinancing is optimal when interest rates decline, as it reduces borrowing costs. For example, Freddie Mac data shows that average 30-year fixed-rate mortgages dropped from 6.94% in 2022 to 5.33% by mid-2023, saving borrowers approximately $150 monthly on a $300,000 loan. Debt consolidation is beneficial for those with credit card or personal loans exceeding 15% APR, as a refinanced mortgage at 4-6% APR lowers overall interest expenses. The Federal Reserve reports that household debt averaged $98,900 in Q2 2023, with credit card debt at 24.1% APR, making consolidation a strategic choice. HELOCs, averaging 7.5% APR, provide liquidity by leveraging home equity, which grew 15.4% year-over-year through Q2 2023 (National Association of Realtors). Combining these strategies can optimize debt repayment, boost cash flow, and improve credit health. However, borrowers must assess closing costs, equity availability, and risk of negative amortization to avoid long-term financial strain.