Can You Use Home Equity to Pay Off Student Loans

Turn your home’s equity into a smarter debt strategy, and simplify student loan payments.

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Understanding Student Loan Refinancing and Home Equity Options

Before using home equity, it's important to understand how refinancing and consolidation strategies differ, and where home equity fits in.
  • What Is Student Loan Refinancing?
    Student loan refinancing replaces existing loans with a new private loan, often with different terms or interest rates. Borrowers with strong credit profiles may qualify for lower rates, which can reduce total interest paid over time.
  • How Home Equity Can Be Used to Consolidate Student Loans
    Homeowners sometimes choose a cash-out refinance or home equity loan to pay off student loan balances. Instead of multiple education loan payments, the debt becomes part of a mortgage structure, potentially at a lower interest rate depending on market conditions. Because mortgage rates are often lower than unsecured loan rates, this strategy can make payments more manageable, though it also ties previously unsecured debt to your home.

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Eligibility and Requirements for Using Home Equity

Not every borrower qualifies for a home equity strategy, but understanding the basics can help you evaluate your options.
  • General Qualification Guidelines
    Lenders typically look for sufficient equity, stable income, and a credit profile that supports repayment. The amount of equity available depends on your home’s value and existing mortgage balance.
  • Can Federal and Private Loans Be Combined?
    In many cases, borrowers use home equity to pay off both federal and private student loans. However, doing so removes federal repayment protections, so reviewing your financial goals carefully is important.
  • When Using Home Equity for Student Loans Makes Sense
    For some homeowners, consolidating student debt into a mortgage structure can simplify finances and reduce stress. It may be worth considering if you want one predictable payment, plan to stay in your home long term, or are seeking lower interest costs compared to unsecured loans. However, because your home becomes part of the repayment structure, this approach works best for borrowers who feel confident in long-term financial stability.

Use your home’s equity 
to pay off debt

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FAQ

Using Home Equity to Pay Off Student Loans

Bottom Line

Using home equity to pay off student loans isn’t the right solution for everyone, but for some homeowners, it can create a more manageable and cost-effective repayment strategy.
The key is understanding the trade-offs between traditional refinancing and debt consolidation through your home’s equity. When used responsibly, the right strategy can simplify payments and support long-term financial goals.

Momentum Loans’ Debt Consolidation Tool helps you compare scenarios, estimate savings, and see how your equity could work harder for you.

Use your home’s equity
to pay off debt.

See Your Savings Now