Home equity loans let you access the assets you have stored up in your home. If you need a large amount of cash to pay bills, to pay for your children’s college, or for home improvements, a home equity loan can be an excellent source of funds. They’re easy to qualify for if you have equity in your home. However, they do come with some risks.
1. Pro: You Pay Lower Interest on a Home Equity Loan
Home equity loans typically carry far lower interest rates than personal loans, which are also much harder to get, and certainly lower than cash advances from credit cards. This is because you’re using your home as collateral for the loan, so the bank feels confident it will get its money back.