| Need advice. Does this loan make sense? |
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mikesc
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 25 Jul 2007
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| Need advice. Does this loan make sense? |
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I have money taken out of my line of equity that is earning about 5.05% in a savings account. The loan rate is 7.5% but is tax deductable. Does this make sense? Does the tax write off make up for the difference? Should I just pay off the line of equity instead?
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Wed Jul 25, 2007 8:32 pm |
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coaster
Senior Advisor
Cash: $ 1356.20
Posts: 6678
Joined: 11 Oct 2005
Location: Wisconsin
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Strictly speaking, that can't be answered without knowing your marginal tax rate, but seeing as how the loan rate is 48.5% more than the income rate, that's more than the highest marginal tax rate these days, so you're losing money, and that's even before factoring in inflation.
~Tim~
Eye Candy : Why Whimsy
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Wed Jul 25, 2007 9:12 pm |
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dstern
Contributing Member
Cash: $ 6.60
Posts: 33
Joined: 18 Aug 2007
Location: UK
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it does seem like a very risky strategy, remember you'd also have to pay tax on what you make from the savings account.
for loans see bad credit secured loan adverse credit loan
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Sun Sep 02, 2007 6:43 pm |
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