“A home equity loan is best used for a one-time goal for which payment will be due in full and which has long-lasting benefits. For instance, a loan makes sense if you want to fund a specific home improvement project that boosts the equity in your house or if you want to pay off high-interest credit card debt in one fell swoop.
Why a home loan is betterA home loan might be a better choice because clearing up credit card debt could take you a long way toward improving a bad credit situation, while saving you thousands in interest. For example, if you owe $10,000 on a credit card that charges 18% interest and you make the minimum monthly payment of 4% of the balance; it will take you over ten years to retire the debt. The interest you pay during that decade comes to $5,575.
If you pay off the credit card with a home loan, you not only save on high interest but you also pay lower interest on the new loan; and that interest is usually tax deductible, up to $100,000.
Mike Hamel is the author of three business books and several articles about mortgage financing. His material is featured on sites like E-lends. To learn more, or to get a no-risk quote on a home loan, visit E-lends. It is a convenient place to see how much home equity you might be able to cash out, and at what rate.
Why a home loan is betterA home loan might be a better choice because clearing up credit card debt could take you a long way toward improving a bad credit situation, while saving you thousands in interest. For example, if you owe $10,000 on a credit card that charges 18% interest and you make the minimum monthly payment of 4% of the balance; it will take you over ten years to retire the debt. The interest you pay during that decade comes to $5,575.
If you pay off the credit card with a home loan, you not only save on high interest but you also pay lower interest on the new loan; and that interest is usually tax deductible, up to $100,000.
Mike Hamel is the author of three business books and several articles about mortgage financing. His material is featured on sites like E-lends. To learn more, or to get a no-risk quote on a home loan, visit E-lends. It is a convenient place to see how much home equity you might be able to cash out, and at what rate.
