Loans and credit lines

Loans and credit lines

PART A: Home Equity Loan

Home equity credit loans and credit lines have become very popular sources of consumer credit. Why do you think individuals are turning to these loans? What is the security for this type of loan? Are there advantages to the borrower beyond the tax deductibility of the annual interest paid? What are some of the disadvantages? Have you or anyone you know made a home equity loan? What was the outcome? What effect does a home equity loan have on your overall financial standing?

IMPORTANT: In relating any examples from real life please disguise the names of individuals in order to protect their privacy.

PART B: Your Credit Score

Discuss the importance of having good credit and how you can maintain that good credit.

Solution Preview

PART A.  A home equity loan is a kind of credit loan that requires the debtor to borrow a loan against the worth of the individual’s home. The security of this type of loan is an individual’s home where it can be referred to as a second mortgage having in mind the first is the one that a person uses to purchase the home. These types of loans have become popular nowadays due to the fact that these loans are much easier to qualify compared to the other loans

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