10 uses for a home equity loan

March 15, 2023

Home equity can be used for more than renovating or fixing your home, including paying for college, consolidating debt and more.

 

Home equity loans are pretty straightforward: You borrow money against the amount of equity you have in your home. Equity is the difference between the market value of your home and what you owe on your mortgage. For instance, if the market value of your home is $150,000 and you owe $100,000, you have $50,000 in equity.

There is usually a lot of flexibility in how you use a home equity loan. Keep in mind: If you are thinking of selling your home in the near future, the home equity loan would be paid in full at the time of the sale.

 

Reasons to consider tapping into your home equity

Here are 10 uses for a home equity loan:

  1. Funding a student loan for yourself or your child 
  2. Paying off or consolidating credit card debt 
  3. Funding a vacation 
  4. Paying for weddings or important celebrations 
  5. Starting a business 
  6. Making home improvements and upgrades 
  7. Paying medical bills 
  8. Making key purchases, such as a car or a truck 
  9. Funding investments 
  10. Set aside for an emergency fund

 

Advantages of home equity loans

Using a home equity loan can have several potential advantages:

  • The interest rates for home equity loans are fixed, instead of variable, and your monthly payment is consistent, so you never have any surprises.
  • You can pay for big purchases little by little.
  • The interest rate you pay on a home equity loan is often lower than those for credit cards or other types of loans.
  • You can usually get access to funds quickly, sometimes within days of completing the loan documents.
  • You also might be able to deduct the interest you pay on a home equity loan.1 Talk to your tax1 advisor for specifics.

 

Do you want to know more about home equity loans or how you can make the equity in your home work for you? Get the details on U.S. Bank rates for home equity loans.

 

1 U.S. Bank, U.S. Bancorp Investments and their representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

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Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.