Your home allows for fast cash access

MSUFCU explains the benefits of equity loans, lines of credit

EAST LANSING, MI (January 28, 2019) — If you are considering making home improvements or funding your child’s education, using the equity in your home can be a good way to access cash quickly. Financial institutions offer loan products to lend you money using your home as collateral. Deidre Davis, chief marketing officer at Michigan State University Federal Credit Union, explained some of the home equity loan options available.

What are borrowers’ options if they want to use equity in their homes for home projects or other expenses?
Davis: There are two ways you can borrow against your home. One is a home equity loan that lets you borrow a lump sum and pay it back over a fixed term at a fixed interest rate like a mortgage or car loan. Another option is a home equity line of credit, which works more like a credit card. For this loan, a certain amount of credit is available on an as-needed basis for a limited term, such as five or 10 years, followed by a repayment period of up to 20 years. It also has an adjustable rate that changes with the market.

What are the benefits of a home equity loan vs. a home equity line of credit?

Davis: Because your home acts as collateral for the loan, home equity loans usually have lower interest rates than credit cards and other types of unsecured debt. Homeowners who want to budget for exact monthly payments may prefer a home equity loan.

For those who don’t want to tie up their equity for a five- to 30-year term, a home equity line of credit might be a better fit. A home equity line of credit will allow the borrower the option to take out money multiple times, but the interest compounds only on the amount drawn, not the total equity available in the credit line.

How do you figure out how much you can borrow?

Davis: You can estimate the amount of equity currently in your home by using websites such as Zillow and Redfin to get an idea of your home’s current market value. Once you have this information, subtract your current mortgage balance from the value of your home to get an approximation of your equity. For example, if your home’s current market value is $150,000, and you owe $100,000, the equity in your home would be $50,000.

What should consumers look for in a lender?
Davis: When shopping for the best home equity loan to fit your needs, look for lenders who have transparent fees, an efficient application processes and can clearly explain available options. Before asking about loan eligibility requirements, limits, interest rates and fees, consider how much money you really need and how you plan to use it.

Many financial institutions offer loan products, including MSUFCU. Visit for more information.

About Michigan State University Federal Credit Union (MSUFCU)

Founded in 1937, MSUFCU has a national reputation for excellence and has received several top industry and workplace awards, including being named a Best Credit Union to Work For® by American Banker for the sixth year, a Top Workplace by the Detroit Free Press for 13 consecutive years, and a National Best and Brightest Companies to Work For® winner for seven consecutive years. MSUFCU has also been certified as a Great Place to Work® for 10 consecutive years and has been recognized by the Credit Union National Association, earning first place for the people-helping-people philosophy Louise Herring Award. The Credit Union operates an award-winning, wholly owned credit union service organization, Reseda Group; along with digital financial platforms AlumniFi and Collegiate; trade name Oakland University Credit Union; and its foundation, the Desk Drawer Fund. MSUFCU is headquartered in East Lansing, Michigan; and has 24 branches; over 350,000 members; $7.61 billion in assets; and more than 1,100 employees. For more information, visit


Allison Horn
VP of Executive Communication and Legislative Affairs
517-333-2424, ext. 2401

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