Pros
- Competitive interest rates, especially compared to personal loans/credit cards
- Home equity loans come with fixed interest rates and payment amounts
- With a HELOC, you can draw funds as you need and only pay interest on what you draw
- You may be able to deduct the interest if you itemize on your tax return
Cons
- If you fail to make payments, the lender could foreclose on the home
- Home equity loans don’t allow you to draw funds only as needed
- HELOC interest rates are variable, meaning your rate and payment can increase
- Qualifications can be more stringent
