Use Your Home's Equity to Finance Your Dream Wedding
With wedding costs substantial and pretty much always on the rise, coming up with funding sources can be tough.
The average wedding cost nearly $34,000 in 2019, according to the popular planning website The Knot. That included about $5,900 just for the engagement ring. In addition, the average honeymoon came to about $5,000. Yikes.
If you're like most Americans, your savings could be a little thin. But don't automatically gravitate toward a credit card or personal loan. If you own a home, all the money you need might be in its equity. Consider a home equity line of credit, or HELOC, for example.
Lower Interest Rate
You can easily score an APR in the single digits with a HELOC. That can mean massive savings when you compare the average credit card rate of 16% APR to something much lower.
You can get a lot more than your typical personal loan. Personal loans are unsecured, meaning they're not backed by any collateral, and therefore have lower limits. With a HELOC, you can get up to 100% of your home's equity, which in many cases will get you closer to that $34,000 figure.
Unlike a traditional loan, you only pay for what you use with a HELOC. The line of credit is simply there for you when you need it. You'll also get much longer to pay it back as HELOC terms can often be up to 20 years.
So, keep that dream wedding within reach with a HELOC. With lower interest rates and higher limits, it's a smart way to borrow and take the "yikes" out of wedding plans when costs get overwhelming.