I spent my 20s mismanaging my money, and came to regret all of those impulse purchases placed on credit cards when my credit score plummeted due to missing a few payments. I didn't learn how much this would affect my life until I was denied for both an auto loan and mortgage in the same year due to my bad credit score. I spent the next few years cleaning up my credit report and putting every extra penny I had toward old debts. Having to put my impulse spending on halt was difficult at first, but it was a great learning experience and I now realize how rewarding saving and investing money really can be. I have put a lot of research into good money management techniques, so I decided to start a blog to share what I have learned with anyone who needs help!
You never know when financial problems are going to arise. Unfortunately, they don't always arise at the most opportune times. In fact, sometimes they arise when you don't have the funds to dig yourself out. If you're in that position right now, you need to find a way to obtain the funds you so desperately need. One way to do that is through a personal loan. However, if you own your home, you may want to look into a home equity loan. Home equity loans are an excellent way to get the funds you need when you're facing a financial crisis. Here are just three of the reasons you should choose a home equity loan over a personal loan.
1. Taps Your Own Investment
Owning a home is like putting money in a savings account each month. You see, each time you pay your mortgage payment, a portion of the payment goes to reduce the amount you owe on your home. As the principal amount is reduced, the equity in your home is increased. When you take out a home equity loan, you're borrowing against the portion of your home that you own. In that way, you're allowing your home to work for you.
2. Lower Interest Rates
When you need a loan, you want to pay the lowest interest rate possible. Unfortunately, personal loans often come with high interest rates, which means you'll be paying more for the money you've borrowed. However, home equity loans often come with a lower interest rate, which will lower the cost of the loan, and lower the monthly payments attached to the loan.
3. Opportunity for Tax Deductions
If you need access to immediate cash for an emergency, you want your money to work for you. It can when you take out a home equity loan. One of the benefits of a home equity loan is that they are tax-deductible, which means you'll be able to claim the interest you pay as a deduction on your taxes. Not only will you pay a lower interest rate for the loan, but you'll enjoy additional savings in the form of a tax deduction; something you won't get if you take out a personal loan instead.
When you're facing a financial crisis, you can't afford to wait for access to the cash you need. With a home equity loan, you won't have to. With your good credit and the equity you have in your home, you can take out a home equity loan from a company like Frontier Community Credit Union.
Share26 November 2017
