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Real-World Applications of HELOCs
Homeowners use HELOCs for a variety of purposes, from home renovations to debt consolidation. For instance, if you're planning a significant home improvement project, a HELOC can provide the necessary funding while potentially increasing your home's value. According to the National Association of Realtors, home improvement projects can recoup up to 70% of their cost in increased home value2.
Another common use is for consolidating high-interest debt. By using a HELOC to pay off credit card balances or personal loans, you can reduce your overall interest payments and simplify your finances. This strategy can save you money and help improve your credit score over time.