If you are a parent who has a son or daughter who will soon be going off to college, you might be dealing with a lot of stress. After all, paying for college for your son or daughter can be quite expensive. Right now, you could be looking at student loans to help fund your child's college education, but you might find that other options are better. These are a few reasons why you may want to consider using a home equity line of credit to pay for your child's college education.
1. You Could Pay Less in Interest
One thing that you should think about when determining how to pay for your child's college education is the amount that you will have to pay in interest. Student loan interest rates can sometimes be high, so you might find that you will get a much lower rate by using money from a home equity line of credit, such as from Rio Grande Credit Union, to pay for your child's college education. Since interest rates can make a huge difference in how much you and your child pay in the long run for a college education, this can be reason enough to consider using an alternative source rather than opting for more traditional student loans.
2. You Can Get the Money Quickly
In some cases, your college-age son or daughter might need money quickly in order to pay for his or her college education. For example, it can sometimes take a while for student loans and financial aid applications to be approved, which could cause your child to miss the deadline to pay for classes. With a home equity line of credit, however, you may be able to provide these funds much more quickly.
3. Minimize Restrictions
With a student loan, there is often a limited amount of money that you can borrow. Even though this money might cover your child's tuition and books, it might not be enough to cover your child's other financial needs while he or she is in college. For example, you could be looking to secure an apartment for your son or daughter, and you may want to make sure that your child has enough money for food, gas and other essentials while he or she is in school. With a home equity line of credit, you don't have to worry about the same restrictions on the amount that you can borrow as you might have to worry about when taking out a student loan.Share