Without delving into the financial cogs that make home equity loans work and by avoiding all of the percentage signs and APR numbers, here's the ultimate question. Are home equity loans good or bad ideas? Answer for yourself:
I notice that the interest rate on a home equity loan is lower than that of a new car loan. I'm going to then take out an equity loan to pay for my new car and take advantage of the lower interest rate as well as the tax deduction that equity loans offer.
My credit card bills are getting too high. Since I'm paying such high interest on them, it's a good plan to pay them off with a home equity loan and then work to pay off that loan instead. I will still take advantage of the low interest and the tax deduction.
There are many debates about the value and problems associated with using home equity loans to fix outstanding debt. There is no quick fix. Be aware that poor credit equals higher interest rates, and many loans are offered with low introductory rates that skyrocket after six months or even a year. The predation of the loan companies has become fierce; question everything before signing. Remember, with a car loan you put your car on the line if you can't pay. With a home equity loan, it's your home that you lose if you haven't budgeted correctly.
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Borrowing against your home equity looks good on paper. But don't do so, unless it's a dire emergency, such as a medical emergency.