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Should I use a home equity loan to pay off my car loan?
"I just found out I can get a home equity loan at 1.99%. I might take out this loan to pay off my car loan, which is at 7%.
Is this a smart move?"
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“Generally speaking, this isn’t a great move unless your car loan balance is only a few thousand.
You’ll immediately lose equity on your home, which is never a good thing, especially if you have a 30-year mortgage.
Instead, you might think about refinancing your current auto loan to a better rate. That’s the smart move.”
View full answer
- Gregory R.
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