If you're thinking about making some home improvements or looking at ways to pay for your child's education, you may be thinking about tapping into your home's equity --- the difference between what your home could sell for and what you owe on the mortgage --- as a way to cover the costs. A home equity line of credit --- also known as a HELOC --- is a revolving line of credit, much like a credit card. You can borrow as much as you need, any time you need it, by writing a check or using a credit card connected to the account. You may not exceed your credit limit. Because HELOC is a line of credit, you make payments only on the amount you actually borrow, not the full amount available. HELOCs require you to use your home as collateral for the loan. LEARN MORE.
A construction loan is a short-term loan that covers only the costs of custom home building. Once the home is built, the prospective occupant must apply for a mortgage loan to pay for the completed home. This type of loan is usually issued for a year and is only meant to cover the actual construction period. During the construction phase, borrowers make interest-only payments.
An auto loan allows you to borrow money to purchase a car or truck. Auto loans are usually simple-interest loans that are to be paid back over a period of typically three or five years. A car is often the second-largest purchase someone will make aside from their home. An auto loan helps make vehicles that cost tens of thousands of dollars more affordable by breaking up the high cost into monthly payments that work with different borrower's budgets. LEARN MORE.
Personal loans, which are typically unsecured, are paid back in monthly installments with interest. There are many good reasons to take out a personal loan, but they are often most useful for financing a large purchase or covering an unplanned emergency expense, such as funeral expenses, medical costs, auto repairs, or major home repairs. LEARN MORE.