Car Loan vs. Home Equity Loan?
Wednesday, 7. July 2010
I recenly got approved for a home equity loan. I am purchasing a car. I can get the home equity loan for 6.6% with upfront cost for the loan at 00. (A 30 year loan which I plan to pay back MUCH sooner). I won’t pay enough interest to get a tax benefit so I am wondering, am I better off to pay a higher interest rate and secure a car loan? Not sure how to firure in the 6.6% plus the 00 cost to get the house loan. Any advice would be greatly appreciated. I am borrowing ,000, which is more than I need and most likely will hang onto the excess money and put it back toward the mortgage loan. Before you ask, I borrowed more than I need as most lenders don’t want to mess with a ,000 loan. Thanks!!!
jolyth_a Says:
I am confused. You are getting a home loand at 6.6%. Are you asking if you should use the extra to get a car? I mean, your first two sentences: "I recenly got approved for a home equity loan. I am purchasing a car" They are two very different loans.
EDIT: If you are looking for a lower interest rate, the 6.6% home equity is not the way tog go. Basically, if you get a car from a dealership, you can tell the financial department that you want to use ABC Bank and you want XYZ interest rate. My new car rate was 4.99% on my car because I told them who I wanted to finance through and how much I wanted my interest rate to be. What do they care? They made a sale and it is up to the bank to agree or lose the sale as well.
henna Says:
home equity loan usually has lower interest rate, so i say go for home equity loan