Say Hello to a HELOC
Looking for ways to pay for home improvements, education expenses and more? A home equity line of credit can be a cost-effective way to finance large purchases and consolidate debt.
After spending more time at home during the pandemic, you might be thinking about remodeling the kitchen, upgrading your entertainment system or investing in new technology at home. Now may be a good time to consider the benefits of a Home Equity Line of Credit (HELOC)[cite::2149::cite].
Thanks to low interest rates, a HELOC can be a cost-effective way to finance big-ticket items. If you’ve lived in your home for a number of years, you may have equity built up that can help you finance large purchases, pay for ongoing expenses or consolidate debt. Use your HELOC in a variety of ways:
- Fund home improvement projects — renovate a kitchen or bathroom, replace the roof or build a deck or patio.
- Cover education costs — everything from college tuition and textbooks to computers and school supplies.
- Pay for major purchases — upgrade to new furniture or new appliances.
- Be prepared for emergency expenses — even if you don’t intend to use a HELOC right away, it may make sense to apply so it’s there when you need it.
- Consolidate debt — use a HELOC to pay off high-interest debt. You may end up with one smaller monthly payment and save hundreds of dollars in interest payments.
How It Works
A HELOC works much the same as a credit card in that you have a revolving amount to access. HELOCs several advantages, including:
- Low interest rates. Interest rates are typically lower than credit cards and other loans.
- Flexibility to borrow what you need, when you need it. The line of credit can be used, paid back and reused over a certain time period.