Home equity can be cheaper than private student loans. It is almost never better than federal student loans, and the reason has little to do with the rate.
Federal loans carry income-driven repayment, deferment, forbearance, and forgiveness programs. Home equity debt carries none of those protections and the collateral is where you live.
Home equity in a primary residence is excluded from the federal aid formula, but cash sitting in a bank account is not. Borrowing early can reduce next year's aid eligibility.
Run your own figures through the calculator. No credit check, nothing saved unless you ask.
Calculate my equityInformally, yes; legally, no. The loan stays in the homeowner's name and on the homeowner's credit.
Generally not — deductibility depends on the funds improving the home, not on the purpose being worthwhile.
Part of The Homeowner's Guide to Home Equity.
Which renovations return their cost, how to size the loan, and how to avoid over-borrowing.
Turning unsecured debt into secured debt lowers your rate — and raises the stakes. Read this first.
Using your equity as a down payment on a rental or vacation home: the math, the risk, the lender rules.