Why Use a Home Equity Line of Credit?

Many people think a home equity line of credit (HELOC)¹ is to be used solely for home improvements, but this is only one option. There are a variety of reasons to use a credit line to access the equity in your home. Everyone’s situation is unique, but here are a few of them:

 

Home renovations

Home renovations are what most people think of when they apply for a home equity line of credit. This is a great use. You can remodel a kitchen or bathroom, finish a basement or an attic, close in a porch, add a deck, or make any other upgrade to a room in your house.

 

Efficiency improvements

Remodeling isn't the only type of home improvement you can make with a HELOC. Efficiency improvements can save you money in the long term. You can replace windows and doors with more efficient options, install insulation in your attic, or purchase smart devices that can help you regulate energy efficiency. Everything from smart thermostats to security systems are available to help you turn your regular home into a smart one. A home equity credit line can help you afford the upgrade.

 

Debt Consolidation

Many people use a HELOC to consolidate their high-interest debt into a lower-rate, one-payment credit line. This can save you money, and it can make your life easier at the same time.

 

Lower interest on credit

Consolidating your debt when you have multiple sources is one thing, but it might be worth it to use a HELOC simply to pay off your credit card debt and move to a lower interest credit option.

 

Student loan relief

Similarly, you can use the credit line to help pay off your student loan debt, which is a major struggle for many Americans. As of January 2022, Americans owed nearly $1.75 trillion in student loan debt, spread out among about 46 million borrowers. That’s about $440 billion more than the total U.S. auto loan debt.²  If you can secure a fixed home equity credit line that has a rate lower than your student loan, it is worth the consideration of using your credit line to pay off the student loan. 

 

Make a much-needed large purchase

Sometimes life throws major, unexpected expenses at us, and we're not always prepared for these. Whether you need money for major repairs to your home, vehicle, or anything else, a HELOC is a way to get a low-interest option that can help you take care of the matter quickly. Even if it's not an emergency, you may just have your eye on a significant purchase that's out of your price range. A home equity line of credit can help you finance it.

 

Go on vacation

Not everyone is going to see taking a trip as the best use of a HELOC, but vacations can get very pricey, especially if you have a sizeable family. This may be the best option to help you pay for the trip you've wanted to take for some time.

 

Now may be your best time

With a home equity line of credit from Nevada State Bank, you won't have any origination fees or closing costs. You'll get low interest-only payments as well as easy access with the ability to simply write a check, transfer online, or visit a branch.

 

 

 

_{1. Subject to credit approval, terms and conditions apply. See banker for details.}

_{2. https://studentloanhero.com/student-loan-debt-statistics/}

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank. Nevada State Bank is a division of Zions Bancorporation, N.A. Member FDIC