Heating and Air Conditioning
Question: >On the financial end, do you think I would be wiser to just pay for this or >take out a loan at 7.5% for a couple of years for the entire estimate of >$7,000? On one hand I would like to hang on to my investments, on the other >hand I would rather not be in debt. Your opinions and comments on this end >of my project, please.
Answer: If you expect your investments to do better than 7.5% over the term of the loan, financially you’d be better off with a loan. If you do it with a home equity loan you may be able to deduct the interest on your taxes. At least one manufacturer is offering to finance on an account with a short term (several months) same as cash deal, but pretty much normal credit card rates if you don’t pay up by the end of those few months. A lot of people have a strong emotional reaction to loans (either pro or con) and rational financial considerations are beside the point for those people. If you’re one of those, go with your gut – it’s the only way you’ll be happy. If you’re asking what I’d do, I’d probably take the loan – that rate is pretty cheap.
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