Tip & How-To about Finance

Pros and cons of home equity loans

There are some really great benefits to taking out a home equity loan. First because the loan has a fixed interest rate there will be no fluctuation as the economy changes. The money that you borrow in a home equity loan can be used to pay off credit cards and will help you to consolidate all your debt into a single payment that you make monthly. Even though the interest rate on a home equity loan may be higher than that of your mortgage it will still be lower than if you were to use credit cards to pay off your mortgage. And finally the interest on the loan may be tax deductible and depending on the use of the loan you may be eligible for leeway in deducting the interest.

At the same time there are a few things that you have to keep in mind before you take out the loan. When you take out a home equity loan you are borrowing a whole lump sum unlike home equity line of credit in which you only borrow as much as you need. You will want to be careful what you spend the money on, if you were to spend the money on remodeling your house then you have a greater chance of the value of your house appreciating as opposed to buying a car that as soon as you drive it off the lot beings to depreciate in value. Probably the most important thing to keep in mind is that when you take out a home equity loan your house is held as collateral so in the case that you are unable to make payments then you will lose your house.

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Which bank provide the home loan with low interest rate?


There are several banks or NBFCs present in market such as Bajaj Finserv, HDFC, SBI, PNB etc that offers home loan with lowest interest rates. You should prefer as all of them offers different features and benefits. But it completely depends on your parameters that matches your eligibility and requirement.
Select all the renowned financial institutions and compare their features, benefits and the rate of interest. Choose a proper lender that offers:
? Low interest rate
? Nil foreclosure charges
? Flexi Scheme
? 3 EMI free months
? Part prepayment facility
? Online account access
? Other features and benefits like life insurance policy

Aug 11, 2016 | Home Money Manager Home Loan Interest...

1 Answer

Do I have to have good credit to take out a home equity loan?


Because your house is held as collateral for a home equity loan your credit score isn't a huge factor. But that doesn't mean that it has no effect, having a low credit score will make your interest rates higher. You can find a comprehensive chart here: http://www.myfico.com/loancenter/homeequity/step4/fairloan.aspx

Aug 26, 2013 | Finance

1 Answer

where can I find rates for home equity loans?


bankrate.com has a really good home equity loan rates calculator. You can find it here http://www.bankrate.com/compare-rates.aspx

Aug 26, 2013 | Finance

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