Posted on: 26 February 2018
Tapping your home's value with a home equity loan can be an excellent way to make financial improvements in your life and invest where it can do the most good. How? Here are 4 times when a home equity loan can make a big difference in your life and assets.
1. Replacement for Student Loans.
Student loans help you get more education that can mean higher income and more stability for years to come. But student loans can be onerous and come with unfavorable rates that damage credit or delay other life events. Tap your home's equity for a better rate and less worry about abiding by multiple loan terms and contracts.
2. Consolidating Debt.
If you carry credit card, payday, or personal loan debt, it's often at a high interest rate and with multiple payment deadlines throughout the month. Default and missing payment dates is common with such debt, and that can ruin your financial freedom. Consolidate high rate debt into one single home equity loan at a much better rate so you can actually pay it off. Be sure to close the other revolving debt accounts once you consolidate so you don't charge on them again.
3. Invest in the House.
Your home is one of the biggest investments most American will make. It must be protected and kept up, though, and that can get tricky when major issues come up. Do you need to replace a roof, fix aging home utility problems, or add on to make the house more attractive to buyers? Tap into the house's value in order to boost its value and make sure it doesn't fall into dangerous disrepair.
4. Have an Emergency Fund.
Many Americans can't even afford to miss one single paycheck or cover an emergency of less than $1,000. But you can be prepared for a sudden emergency—whether it's a health problem, job instability, or helping an aging loved one—by having a home equity loan in place that you can tap as an emergency fund. While it's not advisable to use home equity for just anything, preventing an emergency from becoming a financial crisis for your family may be an excellent use of this resource.
Any of these financial problems can come up for your family at any time. So if you think that a home equity loan may be right for solving them, get started on the process before any emergencies arise. That way, you'll have peace of mind and more financial freedom.Share