5. Home equity loan or home equity line of credit (HELOC)
Similar to a personal loan, a home equity loan can provide you with a lump sum amount that you would pay back in regular installments if you’re a homeowner with sizeable equity on your house. It’s not an uncommon approach to tackling debt.
Don’t confuse this with a HELCO, some equity line of credit, which offers a little more flexibility. You can borrow up to 80% or 90% of the equity in your home at any time you need to and you can pay the amount back over several months. Basically, they’re similar to credit cards.
These options are also advantageous since the rates are lower and your interest is tax-deductible! That being said, they can also be dangerous, and experts advise people who are risk-averse to avoid these methods. Those with unpredictable finances should steer clear since they might put themselves at risk of foreclosure.
