Tax Credit Student Loan
March 11th, 2010
Question: Should I use my home equity line of credit to pay off my car loan and part of my student loan?
By using the HELOC, it’s going to free up several hundred dollars per month, and I can claim it as a tax deduction at the end of the year. On the other side, I’m eating up a sizable amount of home equity by doing so. I’m planning to pay them off either way–I can do it now with the HELOC, or after I sell my house, with the cashed in equity. Which route should I go? Does it make a difference?
Answer: Generally speaking, debt is debt, so whether it’s debt on your HELOC or a student loan or car doesn’t matter. Using your HELOC is usally a better deal because the rates are lower and as you mentioned, you can deduct the interest. The only thing I would caution is if the property values in your area are going down, you may not want to extend your HELOC too much and end up with either no equity or oweing more than the house is worth.
Top Scoops
On Feb 8 Scoop published my article Personal Income Tax Reform in New Zealand , which looks at taxes for individual New Zealand wage and salary earning tax residents.
PRIVATE STUDENT LOAN CONSOLIDATION (No Credit Check)
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