I have an equity line of credit with penfed. Today was the last day of a promotional that locked in 1.99% interest for two years on a home equity loan. I obtained a loan on the line of credit today. My thought was that I could deduct the interest on this loan, and that I could find some type that of investment that would yield something higher than 1.99%. Well, a quick look at CDs does not seem to show a 2 year CD with a greater than 2 percent yield. Even the short term bond fund that I have with Vanguard has not yielded more than 1.99% in the past year.
So I question whether my idea of making a small, relatively safe investment profit from the loan proceeds as well as a tax deduction. Do you think I should just pay off this home equity loan ASAP and chalk this up to experience? I was told I would not pay any penalty for paying the loan early.
So I question whether my idea of making a small, relatively safe investment profit from the loan proceeds as well as a tax deduction. Do you think I should just pay off this home equity loan ASAP and chalk this up to experience? I was told I would not pay any penalty for paying the loan early.