When Is A Home Equity Loan A Good Idea?

Home equity loan line of credits are extremely popular way for most people to cash in on the accumulated value of their home and many banks and financial institutions make them extremely easy to get. As long as the debt does not go over 100,000 , the interest is tax deductible. Why are home equity loans more attractive than credit cards? A $5000 credit card with a 15% interest rate would cost $4860 in interest if you took 10 years to pay it off while a home equity loan of the same amount at 6% interest would only cost $1220.

Advantages of a home equity loan therefore include:
Lower interest rates
Flexibility
Repayment terms are easier

The downside is that failure to repay a home equity loan may lead to foreclosure. Home equity loans may also extend your indebtness. The best way to use a home equity loan is for home improvements or purchasing a second home or tuition. Here are some quality lenders offering low interest home equity loans.