What Can You Do With a Home Equity Loan?
Published November 22, 2013 | Updated January 4, 2014
A home equity loan allows homeowners to borrow from the equity they’ve accumulated. Like other types of personal loans, when you take out a home equity loan you will be required to pay back the loan over a fixed period at a designated interest rate. However, home equity loan rates are typically lower than other loan types, and in some cases the interest may even be tax-deductible. However, the best news about a home equity loan is that you can use the funds however you’d like. Here are just a few of the things you can do with a home equity loan.
Remodel Your Home
If you want to increase the value of your home, consider remodeling it. Renovating your kitchen, bathroom, or bedroom can make your home more attractive when you decide to sell it. Even if you don’t plan on moving anytime soon, you will get more enjoyment and pride out of your newly remodeled home. A home equity loan is a great way to pay for an extensive home remodeling project.
Send Your Child to College
The day that your child receives his or her acceptance letter is sure to be one of the proudest days of your life. Unfortunately, it can also be one of the most stressful if you don’t know how you will pay for their education. Instead of taking out high-interest student loans, consider a Home Equity Line of Credit to pay for your child’s tuition.
Pay Off High-Interest Debt
High-interest debt can be hard to get out of. If you can only afford to pay the minimum amount due on a credit card, auto loan, or other type of personal debt, a home equity loan can help you pay off what you owe. Do not put new balances on the cards after you refinance the debt into a home equity loan. Since Home Equity Loan rates are often lower than other types of loans, you can save hundreds or even thousands of dollars on interest payments alone.