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Author:
Bev Dodd
Web Site: http://www.family-refinance-consolidation-loans.com
Consumer
loan: Choose what's best for you
A
consumer loan includes home equity, automobile, and personal
loans. Consumer loans, also known as personal loans, are used to
finance a variety of purchases, almost all major acquisitions
except the purchase of a home. You may apply for a consumer
loan, for example to pay for a stove, a car, a boat, new
clothes, a vacation or any addition to your home. We'll discuss
this more below.
If
you have a consumer loan (auto, boat, installment, credit card,
etc.), the interest you pay typically is not deductible on your
income tax return. Depending on your situation, interest on a
home equity loan may be fully deductible under the current law.
(Individual circumstances may vary; consult your tax advisor
regarding deductibility of interest and charges.)
Rather
than a consumer loan, you may find a home equity loan is a
better option. Lower Interest Rates: In general home equity
loans charge lower interest rates than most credit cards and
other personal loans. More Cash Availability: The amount you can
borrow using your home as collateral is generally greater than
other types of personal loans. More Flexible Repayment Terms:
Home equity loans have varying repayment periods that can be
tailored to keep payment amounts within your budget. Most home
equity loans require a minimum periodic payment, but larger
payments can be made to reduce your interest costs.
Bills
have a way of slowly creeping up on you. Before you know it,
you’re making monthly payments to credit cards, department
stores, the hardware store and many other places. It’s a
hassle to worry about getting all those bills paid on time.
Instead of a consumer loan, shop for a home equity line; look
for a plan that best meets your particular needs. Look carefully
at the credit agreement and examine the terms and conditions of
various plans, including the annual percentage rates (APR) and
the costs you will pay to establish the plan. Many of those
costs will be similar to the ones you pay when buying a home.
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