Nowadays, it’s incredibly expensive to attend college or a university. Most of us don’t have the cash to pay for higher education up front and wind up taking out high interest student loans. You don’t have to live with that high interest debt though. By using a HELOC, you can save money in the long term by paying it off with a great, lower interest option.
What is a HELOC?
First things first, what is a HELOC? A HELOC, or home equity line of credit, is a loan that is taken out by a homeowner and paid off over a certain period of time. It is similar to a credit card, but uses your home as collateral. With such a valuable asset as leverage, you are able to get a lower interest rate than a traditional loan.
There are usually two periods included in a HELOC loan process; the draw period and the repayment period. The draw period is the amount of time that the line of credit can be withdrawn from and only requires interest payments to be made. The repayment period is, you guessed it, when the total amount borrowed must be repaid over a set time period. Draw periods typically range from 5-10 years while repayment periods are closer to 10-20 years, depending on the loan.
Why Using a HELOC to Pay Off Student Debt is a Good Idea
Taking out student loans through a bank or government program may seem like the easiest option, but with a 6-8% interest rate, you will realize soon after graduation just how much interest that adds up to. HELOCs typically have much lower interest rates (RMLEFCU rates can be as low as 4.25%), making the monthly payments much more affordable.
How Can RMLEFCU Help?
If you think paying off your student loan debt with a HELOC is the right move for you, make sure to use a reputable institution like RMLEFCU. We are currently offering amazingly low rates and even offer a convenient and easy way of accessing your Home Equity Line of Credit by giving you a HELOC Visa card.
Learn more by calling 303-458-6660 or clicking here. Whether you’re a recent graduate with piles of student loan debt or a parent paying for your child’s education, RMLEFCU is here to help you pay your debts off in the easiest way possible!