Why a HELOC might be worth it to you

Many people could use extra money, especially in today’s troubled economy Inflation And a looming recession.

Only four in 10 Americans can use funds from their savings accounts to pay for an emergency of $1,000 or more, a Bankrate survey Available since the beginning of this year. With vague signs of economic relief, many Americans find themselves with credit cards and personal loan. While these can be helpful in certain situations, homeowners have a better option under their own roof: them Home equity.

By using their home equity Home equity loan or Home Equity Line of Credit (HELOC), homeowners can finance major repairs, renovations and expenses – often at lower interest rates than many other credit options. HELOCs, in particular, come with unique benefits that can be valuable to homeowners looking for any edge they can get.

If you think you might benefit from a HELOC, get started now by checking rates and eligibility here.

Why a HELOC might be worth it to you

Here are three reasons why a HELOC may be worth it to you.

It is flexible

Unlike home equity loans or personal loans, HELOCs have flexible terms, so you can use them appropriately. HELOCs work as a revolving line of credit, and you only pay interest on what you use — not the entire line of credit that you were approved to draw on. This can be advantageous for a number of reasons, especially if you are unsure of your long-term financial needs.

So, if you know you’ll need a substantial amount of money soon but aren’t sure of the exact figure, a HELOC can provide flexibility for your financial needs.

Check out your local HELOC options here now to see if a HELOC makes sense for you

Rate is low

One of the first things you’ll notice when looking for a HELOC is the interest rate They are significantly lower than many other forms of credit

Credit cards are currently around 20%, while personal loans are significantly lower but still in the double digits (think 10%, roughly). A comparison of that HELOC interest rates Around 7% (for those with excellent credit) and you can see how much more you can save.

Many people use HELOCs and home equity loans Consolidate or pay off their existing debt Because the rates on these options are significantly lower than their other loans. So if you owe money and want to pay it off smartly, a HELOC may be worth it.

Interest is tax deductible

HELOCs are typically used to renovate or improve a homeowner’s residence repair. In this situation, the borrower can use it in the year in which the interest was paid on the line of credit duty free.

“Home equity loan interest and lines of credit are deductible only when the borrowed funds are used to purchase, construct, or substantially improve the taxpayer’s home that secures the loan.” The IRS. “The loan must be secured by the taxpayer’s principal home or second home (qualified residence) and meet other requirements.”

So if you know you need money for home improvements, a HELOC may be worth it.

Explore your HELOC options here now to learn more

Bottom line

Not every financial product or service is right for everyone. Many are specific to individuals and their financial circumstances. That said, homeowners looking for extra cash can benefit from moving to a HELOC. This credit option comes with flexible terms and significantly lower interest rates than some other credit options. And, if used for an IRS-approved reason, the interest may be deductible during tax season.