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?"
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Answered on Jun 16, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“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.”
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