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Do Not Take Out A Home Equity Loan To Pay For Your Car

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Keith Hake
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The bank will use the equity to loan you money for a specific amount of time, usually at a fixed rate.

According to Bankrate.com, the average home equity loan is about five percent.

Home equity loans typically have terms of 10 years or more.

So not only are you taking on debt, which is not necessarily a bad thing if managed right, you are using your home s value as collateral against a purchase that rapidly goes down in value.

Many Americans learned a hard lesson about relying on their home s equity during the last housing crisis.

This can be a smart move if you have credit card balances with an 18 percent APR.

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Keith Hake
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