Terri asks a #trulylocaladvice question via Facebook: If I own my home which is better to have 1 a line of credit or 2 a personal loan? Deciding on a line of credit or a personal loan should be based on the purpose of the loan. Unlike a home equity line of credit (HELOC), which is a wonderful product to use for home renovations, investments and emergencies, a regular line of credit is great if you want to make on-going purchases. Keep in mind that a line of credit is revolving credit and should not be used as a debit card for every day expenses. The interest rates are generally lower than a personal loan when secured with your property. A personal loan has a fixed payment over a term and is paid down. If you are purchasing a vehicle, wanting a vacation, consolidating high interest revolving debt it may be wise to have a fixed term loan. Lines of credit generally require interest only payments made monthly, where a personal term loan requires principal and interest payments monthly, therefore the line of credit payment may be much lower but will not be paid off as a term loan will. A Financial Check Up will determine which is best for you. We will look at your monthly expenses, your cash flow, any other outstanding debts and work together to decide your best options. This is the time to have a discussion with your advisor to help you in your unique situation. Catherine Palmer, Financial Services Specialist, Dorchester Road https://penfinancial/SharedContent/documents/1biocatharinepalmer.pdf
Posted on: Thu, 13 Nov 2014 22:30:02 +0000