Question for the Money Doctors

Question submitted on Mar 8, 2012.

Question

I owe $14,000 on a home equity loan, payments are $960 a month, I have savings to pay it off, the interest rate is under 1%, I pay $70-$80 in interest on the home equity loan a month, should I pay off the loan

Answer

You did not indicate what the interest rate on the home equity loan was, but it appears to be approximately 6%.  Assuming that you have other emergency funds available to meet your liquidity needs, yes I would pay off the home equity loan.

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