Parents
Home Equity Loans
Find the right educational financing options for you
- Learn more about using home equity to pay for education related expenses
- See home equity and home equity line of credit options
- Click to apply online or by phone
- Rate reductions
- Waiver of fees
- Principal reductions
- Cash rebates
- Waiver of final payments
There are some benefits that you get just for taking a particular loan, while others you must earn. Lenders can require you to follow certain rules in order to qualify, such as using a bank account to automatically pay (debit) you monthly payments and/or making all of your loan payments on time.
Sample $5,000 Loan - Examples of Possible Savings for Typical Borrower Rewards
| No rewards | On-time payments 3.75% Principal Reduction after 36 on-time payments | Auto-debit of payments 0.25% Interest Rate Reduction for automatic debit of payments | |
|---|---|---|---|
| Monthly Payment | $61.19 | $61.19 | $61.19 |
| Number of Payments | 120 | 116 | 114 |
| *Total Cost of Loan | $7,342.95 | $7,044.85 | $6,938.36 |
| 1st Payment Due | Sep 2010 | Sep 2010 | Sep 2010 |
| APR | 5.39% | 4.92% | 4.74% |
*The Total Cost of the Loan will change based on a combination of the monthly benefits and APR for each type of reward.
- A certain number of consecutive, on-time payments
- Automatic direct debit of your monthly payment from a checking or savings account
Check with each lender to see how and if you qualify for borrower benefits offered.
- Failure to continuously pay on time
- Discontinuing the use of automatic payments from a checking or savings account for the monthly payment
- Not understanding the definition of "on-time" payment
- Cancellation of borrower benefits by the lender or the sale of the loan to another lender
- Failure to continue to meet the requirements for the borrower benefits means you may owe the lender the amount saved from using the benefits.
For more information on borrower benefits, check with your lender.
Understanding Home Equity Loans
A Home Equity Loan is basically a second mortgage where the applicant's residence is used as collateral for a secure line of credit based on the available equity in the home. Homeowners can often borrow up to the current value of their home, minus any outstanding amount owed and use the funding to pay for any expenses, including education expenses.
Interest on a home equity loan could be fully tax deductible, while interest on student loans allow for a fixed maximum deduction each year on the interest paid. Check with an accountant to understand how available tax benefits on home equity vs. student loan products may benefit you.
The interest rate on a home equity loan is often higher than the interest on federal student loans, but lower than interest rates on private student loans.
FAQs
What are borrower benefits?
Borrower benefits, or loan discounts, can save you money on your loan. Review the example below to see how borrower benefits can change the pricing on a loan. Common borrower benefits include:
- Rate reductions
- Waiver of fees
- Principal reductions
- Cash rebates
- Waiver of final payments
There are some benefits that you get just for taking a particular loan, while others you must earn. Lenders can require you to follow certain rules in order to qualify, such as using a bank account to automatically pay (debit) you monthly payments and/or making all of your loan payments on time.
Useful information and insights on student loans, financial aid, college funding and student loan consolidation
Tips
Ask schools for financial aid information to pay for your child's K-12 private education.
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