Using A HELOC To Pay Off Your Student Loans

When it comes to paying for college, some parents look for alternatives like using a HELOC or home equity loan instead of student loans.

Your home’s equity can be used not only for home improvements but also for paying for college, or even paying off old student loans.

When it comes to using your home’s equity, Helen Huang, Senior Director of Product Marketing for SoFi’s mortgage products, says there are plenty of benefits, “Equity is a tool for improving your financial position. Use it to pay off higher interest credit cards or student debt, or to make high-value improvements to your home—like remodeling a kitchen. Banks need to know you can use the equity responsibly.”

To utilize your home’s equity, your bank or mortgage company creates a HELOC or home equity line of credit. You can take draws on this line up to the limit. Once the line has been created, you can continue drawing on it without the need to fill out an application each time.