Top 5 Ways to Use a Home Equity Loan

April 08, 2021
When you’re planning a home renovation or sending your kid off to college, a home equity line of credit is a great option for accessing funds needed at a low interest rate. A home equity line of credit allows you to borrow against your home’s equity to finance a major expense. Wondering if a home equity line of credit is right for you? Here are a few tips to make your home’s equity work for you.
 

Maximize your home equity while keeping your payments low.

An interest only line of credit allows you to keep a low monthly payment while paying only the accrued interest over a 10-year period, called the draw period.
 

Keep flexibility and control over your budget.

A key factor in home equity loans is the flexibility and control you have over budget and cash flow. Having a flexible option like a home equity line of credit is in some cases better than a credit card or a personal loan.
 

Take advantage of low interest rates.

Most people choose to use a home equity loan to make a major purchase, fund improvements to their home or to make an investment. And because it’s backed by collateral, interest rates are very low and may be tax deductible.
 

Refinance your home equity loan before the draw period ends.

If your current home equity loan is nearing the end of its draw period, this is usually the best time to consider an interest only line of credit. This will allow you to continue to pull from your home’s equity while keeping your payments low and flexible. Refinancing your home equity loans helps you avoid expensive points or balloon payments.
 
Whatever your need is, a home equity line of credit is a great option to help you achieve your financial goals. Here are the top 5 ways to use a home equity line of credit:
 
  1. Home Renovations
  2. College Education
  3. Investing in a business
  4. Consolidate High-Interest Debt
  5. Pay Emergency Expenses
 
To see if a home equity line of credit is a good option for you or to maximize your current loan, visit PBCU.com or contact us at 888.233.7228.