It’s a lesson you were probably taught from a young age. Maybe when you were taking out your first book at the library, promising to pay a friend back lunch money for Taco Tuesday, or begging your parents to let you use their car for the night.

It’s the lesson of borrowing responsibly.

And as every adult on the planet knows, it’s key to reaching many of your financial goals, such as buying a car or paying for college, since few people can afford to do that on their own today.

If you own a home, you may be able to take advantage of a great opportunity for borrowing responsibly – a home equity line of credit or HELOC as it is known on the financial street.  A HELOC is a revolving line of credit that lets you borrow using your home’s equity, which is the portion of your home’s value that you own.  A HELOC works like a credit card, allowing you to borrow and repay funds over and again. But because a HELOC is secured by your home, it’s critical that you use it responsibly. Here are four smart suggestions:

1. Improve your home. That means making wise improvements, such as non-budget busting kitchen remodels, bathroom upgrades, and garage door or window replacements. It doesn’t mean buying a big screen TV or sectional with a compartment for potato chips.
2. Pay off higher-interest debt. Do you have higher-interest debt, such as credit card or department store debt?  It may be a good idea to consolidate that debt with a HELOC, which generally offers lower interest rates. If you do consolidate with a HELOC, be careful to not run up your credit card debt again, which would defeat the purpose of the consolidation.
3. Finance education. According to U.S. News & World Report, the average college tuition and fees in 2018-2019 was over $35,000 at private colleges and nearly $10,000 for public schools. Because HELOCs offer lower rates than some student loans, it may be a wise choice for college financing.
4. Prepare for unexpected expenses. Let’s face it, life is unpredictable. And any unexpected job or health-related circumstance could require you to come up with cash quickly.  Having a HELOC available would allow you to get the money you need as soon as you need it without having to wait for a loan approval.

Need to borrow? We’re responsible.

If you’re interested in smart responsible borrowing, learn more about Avidia Bank’s HELOC Product.