A home equity loan can be an ideal way to source extra funds in many different rate environments. With interest rates as low as 7.00% APR*, the repayment plan can be an affordable solution to meet your goals. If approved, you’ll receive the funds in one lump sum within a few days. See more about how these loans work in this blog post.
The friendly team at MSGCU often works with members who aren’t aware of the great borrowing opportunities available with a home equity loan. While there aren’t restrictions on how to use these funds, it’s important to choose wisely since you’re essentially borrowing against your home with this loan. Here are a few forward-thinking uses for a home equity loan:
1. Home improvements
One of the most popular uses for home equity is home renovations and improvements. Using your home’s equity for such projects is a smart choice for many reasons. For one, the money you put into the renovations acts as an investment. If you choose improvements that increase the home’s value, you can make back the money you spend or even see a return when you sell your home. Also, if you use the funds from a home equity loan to increase your home’s value, you may be able to deduct the interest paid on the loan from your taxes (be sure to consult with your tax adviser).
2. Debt consolidation
Another popular use for a home equity loan is to consolidate high-interest debt. Paying off multiple debts that have high interest rates can be cumbersome and difficult to manage. Worse, the heavy interest rates mean more of your money goes toward paying the interest with less paying down the principal. Using a home equity loan to consolidate debt to one single, low monthly payment can slash a pile of debt by several thousands of dollars and help shorten repayment time by several years.
3. College education
When interest rates are falling, funding a college education through a home equity loan instead of a high-interest student loan can be a smart choice. Similarly, homeowners struggling to meet their student debt payments without defaulting on the loan might want to use their home’s equity to pay off the debt quickly and replace it with a more manageable low-interest loan.
4. Funding a large purchase
Many turn to credit cards or personal loans when it comes time to finance a large purchase such as a wedding or dream vacation. However, borrowers can save big in interest charges using their home’s equity over other higher-interest options.
5. Emergency fund
If you’ve been struggling to get an emergency fund going, tapping into your home’s equity can be a great way to get what you need. You’ll have a large stash of cash to build your fund, and the manageable payment plan will help you put money into savings each month, too.
If you’re ready to take out a home equity loan, or just want to learn a bit more about them, we’re here to help. Give us a call at (586) 263-8800, chat, make an appointment or stop by any of our 22 local branches to meet with a friendly MSGCU team member.
Category: Finance
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