Is a HELOC Worth the Risk?

Is a HELOC Worth the Risk?

From Money Girl by QuickAndDirtyTips.com

May 15, 2026 · 15 min · Episode 1019

About this episode

Laura discusses the pros and cons of taking a home equity line of credit (HELOC) for personal expenses.

1019. If you have enough home equity and not enough cash, you may wonder about taking a home equity line of credit (HELOC). Laura answers a listener’s question about whether taking a larger HELOC to pay for an expensive car repair and an upcoming wedding is a good or “horrible” idea.  Key Takeaways: Most lenders require you to maintain at least 20% home equity after tapping it with a HELOC. HELOC borrowers must also have enough income, a suitable debt-to-income ratio, and sufficient credit scores to qualify. Getting a HELOC gives you more flexibility and lower interest rates than other financing options, such as a credit card. If you use HELOC funds to buy, build, or remodel a home, interest paid on a limited amount of debt is tax-deductible. Primary HELOC downsides include paying variable interest, reducing your home equity, and risking foreclosure if you’re unable to repay it. Upcoming Wedding Series Coming Up: We want your questions about wedding finances! Whether you're the bride, groom, or a guest, send us your questions about budgeting for the big day. Email: money@quickanddirtytips.com or leave a voicemail: (302) 364-0308.  Discover more from Money Girl! Facebook…

People in this episode

Host: Laura

Topics covered

  • HELOC
  • home equity
  • financing options
  • wedding finances
  • debt management

Keywords

  • HELOC
  • home equity
  • car repair
  • wedding
  • interest rates
  • tax-deductible
  • foreclosure
  • debt-to-income ratio

Mentioned in this episode

Organizations: QuickAndDirtyTips.com

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