Debt Consolidation Loan vs. HELOC: What’s the Right Choice for High-Income Borrowers?

Income is high, but liquidity is low

Even if you’re a high earner, you may still struggle with low liquidity. This may be because you have high monthly expenses due to a large mortgage, business startup costs, and/or funding your child’s tuition. You might also carry a substantial amount of student loan or credit-card debt.

Here’s the good news: Through debt consolidation, you can simplify your finances, lower your monthly payments, and reduce interest charges. You may also increase your cash flow without sacrificing your liquidity.

Common options for high-earners: Personal loans and HELOCs

At first glance, personal loans and HELOCs seem similar. However, they differ dramatically in terms of structure, risk, speed, and flexibility. A personal loan offers a lump sum of money upfront, while a HELOC provides a revolving line of credit to pay off high-interest debts. Both options usually come with attractive interest rates, especially if you have excellent credit.

A debt consolidation loan is a type of personal loan that allows you to combine multiple high-interest debts—such as credit cards or other personal loans—into one fixed monthly payment. Because these loans are typically unsecured, you don’t need to pledge collateral, like your home or savings account, and you can usually collect the funds fairly quickly.

A HELOC, on the other hand, is a revolving line of credit that lets you borrow against the equity in your home. While HELOCs can offer flexibility in how and when you use the funds, they’re secured by your property—which means your home is at risk if you can’t keep up with payments. Interest rates are usually variable, so monthly costs can fluctuate over time.

The table below shows the key differences between a debt consolidation loan and a HELOC.

While a HELOC has its benefits, it’s not ideal for debt consolidation— especially if you can qualify for a debt consolidation loan with a low interest rate and favorable terms. Here’s why:

You’re putting your home on the line

When you use a HELOC for debt consolidation, your home serves as collateral. If things don’t go as planned and you fail to make your monthly payments, the consequences go beyond a lower credit score— the lender may foreclose on your property.

This risk can be especially concerning for high-income borrowers whose income fluctuates due to business ownership, self-employment, or commission-based structures.

Variable rates = unstable payments

Another drawback of a HELOC is that its variable interest rate is tied to the prime rate. Even if you score an appealing initial rate, it’s not set in stone. For example, the prime rate has been rising steadily since 2020, causing average rates for HELOCs to reach nearly 8% in 2025. There’s no way to tell for certain whether rates will continue to rise or fall moving forward, making it nearly impossible to budget consistently.

Approval can be slow and documentation-heavy

HELOCs typically require property appraisals and extensive underwriting. This process can take weeks, making HELOCs less ideal when you need fast access to funds or immediate debt relief. Plus, you may owe origination fees, appraisal fees, and other closing costs, which can increase your total cost of borrowing.

Fortunately, debt consolidation loans make it easier, faster, and more affordable to consolidate your high-interest debt. Here’s why many six-figure earners are leveraging them to improve their finances:

Simplicity and speed

Debt consolidation loans, like those offered by BHG Financial, are quick and easy to obtain. You may get approved in as little as 24 hours, and funds can be dispersed in as few as five days.² Most importantly, debt consolidation loans come with fixed rates that allow for more effective budgeting, preventing unwanted financial surprises and unnecessary stress.

No collateral, no problem

These loans are unsecured, so there’s no risk of losing your home or business assets. This makes them particularly attractive to professionals with significant non-liquid net worth who want to manage debt without jeopardizing their property.

At BHG, we understand that high earners tend to have complex finances. That’s why we consider your unique income structure and financial situation, and tailor our solutions to your needs.

Used strategically by high earners

High-income households are increasingly turning to personal loans to simplify finances and reclaim cash flow. For many, debt consolidation loans provide a strategic way to reduce complexity while keeping payments predictable.

If you’re unsure of whether you’d be better off with a debt consolidation loan or a HELOC, the table below is intended to steer you in the right direction. A loan is the ideal move if you hope to pay off high-interest credit card debts, prefer predictable monthly payments you can plan for in advance and want to access the funds quickly without putting your home on the line.

At BHG Financial, we offer personal debt consolidation loans for medical, legal, and business professionals who value speed. Here’s why our loans stand out:

• High loan amounts: Most lenders cap loan amounts to $100,000 or less. With BHG, you can borrow up to $250,000¹ and cover your debt consolidation needs as well as any other major expenses.
• Fixed rates and flexible terms: Our industry-leading fixed repayment terms extend up to 10 years.^1,3 This helps ensure consistent monthly payments that comfortably align with your budget and lifestyle.
• No personal collateral required: You can get approved for a BHG debt consolidation personal loan without putting your home, car, or savings account on the line.
• Easy prequalification: We make it a breeze to see potential loan offers so you can do your research and find the best options. Best of all, prequalifying won’t impact your credit score.⁴