Re: Get rid of home equity or car loan?
Going contrary to the tide: If you deduct the interest on the home equity loan, it may actually have a lower interest rate.
For example, if you're in the 25% tax bracket:
7.25% x (100% - 25%) = 5.4375%
This would also make a smaller dent in your savings. Of course, if you don't do deductions, paying off the home equity loan before the car note is the better option due to the higher interest rate.
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