Getty Images/iStockphoto
You have an expensive home repair or remodeling planned? You are thinking of open a business? In any case, or for a multitude of other reasons, you may need access to $70,000. There are multiple options to consider by borrowing this amount of money. Credit cards and personal loans are two alternatives to think about. But, to home loan could be a better choice.
These loans usually come with lower interest rates because they are attached to your house. But, with yours home as securityyou should make sure you can afford the payments before you borrow the money.
So, how much would a $70,000 per month loan cost? and how would that cost compare to the monthly cost of credit cards and personal loans? This is what we will calculate next.
Check here for the home equity loan interest rate you're eligible for.
How much would a $70,000 per month loan cost?
There are a few factors that will determine the monthly cost of your home equity loan. These include the interest rate and loan amount. your term it can also have a significant impact on your payments.
Terms of 10 and 15 years are some popular options to consider. And the average interest rates for home equity loans with these are 8.74% and 8.73%, respectively. At 8.74%, your monthly payments on a 10-year $70,000 loan would be $876.91. And at 8.73%, you'd pay $698.79 on a $70,000 15-year loan.
But the monthly cost of your loan isn't the only thing you should consider. There is a significant difference between the overall cost of a 10-year $70,000 loan and its 15-year alternative. Over 10 years, you'll pay a total of $105,229.28, including $35,229.28 in interest. Over 15 years, you'll pay a total of $125,781.76, including $55,781.76 in interest.
So while you may save on the monthly cost of your loan by choosing a 15-year term over a 10-year term, you can experience significant savings in the long run by choosing the 10-year option.
Find out how much your home equity loan payment would be today.
How home equity loan costs compare to the alternatives
The difference in the monthly cost between home loans and personal loans or credit cards can be important. According to Bankrate, the average credit card interest rate is nearly 21%, as of June 26, 2024. And the average personal loan interest rate is 12.35%.
If you took out a 10-year $70,000 personal loan at 12.35%, your monthly payments would be $1,018.51. If you opted for a 15-year term at the same rate, your monthly payments would be $855.94. If you chose a 10-year term, you would pay $52,221.26 in interest while you would pay $84,069.90 in interest if you chose a 15-year term.
Also, $70,000 in credit card payments at 21% interest would be $1,399 per month over 10 years. Of course, these payments would decrease as your balance decreases.
Based on these numbers, you could get substantial savings on personal loans and credit cards if you borrow $70,000 with a home equity loan instead.
Take advantage of the savings now with a home equity loan.
The bottom line
You would pay between $698.79 and $876.91 per month on an average loan amount of $70,000, depending on the term and interest rate of your loan. That pales in comparison to the $855.94 to $1,399 monthly payments you'd have to make if you borrowed the same amount of money with a personal loan or credit card. Compare today's leading home equity loans to access the money you need now.
