Home equity loan or home equity line of credit

Home equity loan or home equity line of credit

If you have a credit score of at least 700, you should consider a credit card with a 0% introductory APR. These offers typically last for 12 or more months, and some don’t charge any balance transfer fees if you transfer a balance within the first 45 to 60 days of getting the card. This can be a great way to pay down existing debt without racking up any more in interest.

Of course, you’ll want to be sure to pay off your balance before the 0%-interest period runs out. Many credit cards will charge you the full amount of your deferred interest if you cannot pay off your debt at the end of your introductory period.

Most of these cards will offer points or cashback on purchases, but you should pay down your debt before spending money beyond what you need to pay off your expenses. Chase, Citi and Barclays all offer excellent balance transfer credit cards.

401(K) loan

If you have an eligible 401(k), you can borrow up to $50,000 or half of the amount you have, whichever is smaller, to use for almost any purpose. However, these loans are not without their risks.

Because you are borrowing funds from your retirement plan, you will be missing out on some of interest you would have gained on your investments and setting yourself back on your retirement goals. While you will pay yourself back with interest, it’s usually lower than https://installmentloansgroup.com/installment-loans-sd/ what you could earn through the market.

In general, you’ll need to pay the loan back within five years. Not all plan sponsors allow employees to borrow from their 401(k)s. And if you leave your job before your 401(k) loan is repaid, you may have to pay back the full balance right away – with an exception for people who use the loan to pay off a primary mortgage. Continue reading Home equity loan or home equity line of credit