Uncertain economic stretches make us take a second look at our finances. Between high interest rates, rising costs for consumer goods and emerging tariffs, you may be considering options for covering essential or unexpected expenses. And unpredictable events can happen during the most stable of economic times, like a job loss, that can affect your financial approach. While you may be tempted to immediately reach for your hard-earned savings, there are actually many ways to leverage your financial resources to see you through rough patches without affecting your savings.

Home Equity — Not Just for Home Renovations

There is a big misconception about home equity loan products. Many people assume that it is exclusively for home renovation; for installing new kitchen cabinets or erecting a backyard deck. And while home equity loan products can certainly be used for this purpose, they can also be used for almost anything, making them a smart financial option.

Here’s a quick overview of how home equity loan products work. Equity is the amount of your home that is paid off. You can take out equity in a loan or line of credit. A home equity loan uses your house as collateral and features a fixed interest rate, term and payment; in other words, a predictable loan payment each month. This type of loan results in one lump sum of money that you can use.

If you want a source of money you can draw on if and when you need it, or you’re not sure how much money you may need, a home equity line of credit can be a solution. This line of credit can be drawn from over time and has a variable rate. If you want to learn more about home equity products, like how to calculate your available equity, check out our article here.

While there are many loan options when you require extra funds, homeowners should take into consideration that home equity loan products generally have a lower interest rate than other loans. This is due to the collateral — your home. A home equity loan or line of credit can be a smart move utilizing your house as a financial asset.

Let’s talk more about the misconception that home equity loan products can only be used on home renovations. A home equity loan or line of credit can be used on almost anything. There are few limits as to how the money is used. Here are some popular usages, after renovations:

  • College tuition or other education-related costs
  • Wedding
  • Travel or vacation expenses
  • Consolidate debt
  • Auto repair
  • Medical or dental bills
  • Extra funds to cover essentials during a difficult financial period

Use What You Have

There are many ways you can creatively use what you have now — like a house — to produce extra funds. Even if you are not a homeowner or a home equity loan isn’t the right fit for you, there are many options to still consider. Make a list of all your financial assets, no matter how small, and see if they could be a source of liquidity to get you through a rough patch.

Borrow against your 401(k): If you have a 401(k) or similar retirement fund, you may be able to take out a loan against the amount. Not only is your 401(k) setting you up for a solid future in retirement; it can also be leveraged before then to provide you with funds to use now. Contact your human resources department or employer benefit group to learn more.

Secured loans: With a secured loan, you can use either your savings or certificate account as collateral for your loan. Having collateral for your loan ensures that your rate remains low, while also leaving your accumulated savings untouched.

Refinance: Do you have any current loans? Explore refinancing options with us to potentially lower your monthly payments and ease the burden of extra expense.

Avoid

When you need extra funds, it can be tempting to fall for the quick cash promise payday lenders peddle. However, they are designed to trap you in a never-ending cycle of debt. You can read more about the dangers of payday lending here. Even if you don’t think you have other options, there are always better solutions. We offer unsecured personal loans and credit cards with competitive rates, to help you when you need it.

Your Needs Are Unique — So Are Our Solutions

Your financial situation is as unique as we are. Finding creative solutions to your financial needs is key to our commitment. When economic times become difficult, or when personal circumstances change unexpectedly, it’s a good idea to weigh all your options. We invite you to stop by a branch or give us a call at 630.844.4950 to help you find the best fit. There are often many underutilized solutions that can be used to your advantage. We look forward to working with you!