Talked to a loan officer at my local credit union who said cash out refi for $15k was smarter than a personal loan

2 comments

2 Comments

Gotta push back on that a little. Using your house as collateral for just 15 grand seems like overkill when you could probably get a personal loan at a reasonable rate without putting your home at risk. Sure the rate might be slightly lower but is it really worth the extra fees and paperwork for that amount?

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the_karen8d ago

Actually I'm gonna go the other way on this. With a personal loan for 15 grand you're looking at maybe 10-12 percent interest if your credit is decent, but a HELOC or home equity loan can get you under 6 percent right now. That difference adds up quick, like over a thousand dollars in interest saved over a few years. And the fees? Most lenders will roll those into the loan anyway, so you're not really paying out of pocket. Plus the paperwork is basically just proving you own the house and have some equity, which most people can do with a tax return and a pay stub (or two). Yeah it's secured against the house, but if you're paying it back on time that risk is pretty low, and the savings are real.