Amidand , many Americans may find themselves looking for any help they can get.
While many credit options are available to help make ends meet, homeowners should consider looking to their homes for a boost. By taking out aor , homeowners can utilize the equity they've built in their home to pay for emergencies, major home repairs or other large expenses. These forms of credit generally come with favorable interest rates and can provide a valuable tax deduction if used for IRS-approved reasons.
To get the most out of a HELOC, however, it helps to first know what a good interest rate is. As with most forms of credit, the lower the interest rate, the better the product or service will be for your needs. Fortunately, HELOCs are one of the lower interest rate options currently available.
If you think you could benefit from taking out a HELOC, start exploring your options here now or use the table below to check your eligibility.
What is a good HELOC interest rate?
As with interest rates on credit cards and personal loans, the lower the interest rate, the better it generally is. To determine what a "good" rate is, simply compare what HELOCs are currently offering to what you can get with either of the other two credit options.
The average interest rate for a credit card is currently around 20%. For personal loans, it's been about 11%, according to the Federal Reserve. A HELOC, at the same time, is approximately 7%.
Just understand that HELOCs come with both fixed and variable interest rates. This can be favorable if you get locked in at a lower interest rate, but if you get a variable rate, it may go up or down based on external factors. Do your homework and crunch the numbers to make sure either option works for you. And remember: The best terms and rates are generally reserved for those applicants with the highestand reliable credit history. So make sure to get your credit in top shape before applying.
HELOC benefits to know
Lower interest rates aren't the only benefit HELOCs offer. Here are two other major benefits those considering a HELOC should know:
- Interest may be tax-deductible: Arguably the greatest appeal of a HELOC is the IRS explains online. "The loan must be secured by the taxpayer's main home or second home (qualified residence), and meet other requirements." you can get if you use it for approved reasons. "Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer's home that secures the loan," the
- You only pay interest on what you use: With some credit types, you'll get stuck paying interest on the full amount you were approved for, regardless of how much you use. With a HELOC, you'll pay interest only on the amount you utilize. So, if you apply for a line of credit for $50,000 but only use $25,000, you'll only have to pay interest on $25,000.
Explore your HELOC options now and get started and get started!
Have more questions about HELOCs? Not sure if they're right for you? Learn more about this unique credit option by checking out these articles:
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