What is an advantage of having an equity line v. a credit card?
The true interest rate for an equity line is substantially lower than the rate for a credit card . What is a benefit of having an equity line v. a loan? The borrower does not have to pay any interest for the unused portion of the loan which may be substantial. For instance, the borrower who needs to borrow $100,000 to make an improvement on a house but will use only a small portion at a time over a long period of time, may obtain a $100,000 equity line and write a check for that small portion of the $100,000 equity line when the borrower needs it. If the borrower earns extra income, she/he may pay down the equity line and will not need to pay any interest on that portion which she/he paid down and the unused portion. If the borrower takes out a loan and uses only 50% of that loan, he/she would be paying 200% of the rate stated on the loan. Even if the borrower put the unused portion of the loan in a saving account, the interest rate on the saving account is so low that the effective ra
