Is home equity credit loan the right loan product for you? If you are looking to borrow money, home equity credit lines are one useful source of cash. Initially at least, they should provide you with a fairly large amount of cash at relatively low interest rates. That is cash that is loaned to you for your own purpose, so you can decide what you would like to do with the money loaned to you. Home equity credit loans may provide you with certain tax advantages that are unavailable with other kinds of loans. (As always, it is important that you should check with your personal financial adviser for exact details.)
Home equity lines of credit do require you to use your house as collateral for the loan. Of course, this will put your home at risk if you are late on your loan payments or cannot for whatever reason make your monthly payments. This is of course not something anyone expects to happen when taking out a loan, but be careful and make sure that you do keep up with your loan repayments. Missing more than one loan repayment is iffy, two or more missed payments dangerous. It is possible that you may well lose your home if you do not keep up payments on your home equity loan. Home equity credit loans often require a large final payment which may lead you to borrow more money to finally pay off your debt, or the loans may put your home in jeopardy if you cannot qualify for refinancing. If you do sell your home, most plans require you to pay off your loan at that time. In addition, as home equity loans give you relatively easy access to cash, you might find you borrow money more freely.