Pay your car loan with a HELOC?

Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

Dear Driving for Dollars,
I have two, 2007 model-year cars that I owe a total $18,000 on, with loans that are at 6.2 percent. Should I transfer the debt over to my adjustable home equity line of credit at 2.99 percent? We plan to have it paid off in two years, but I’m worried about the adjustable rate.
— Bradley

Dear Bradley,
I understand why you are worried. It’s hard to know whether you will pay more in the long run than you would with the fixed car loan when you don’t know how much your adjustable rate will increase. To see the trends with home equity lines of credit, or HELOC, check out the graph rate trends analysis tool and select the HELOC you have. Your safest bet financially is to make larger monthly payments on your current loans to pay down the principals, which effectively reduces the interest rates.’s early payoff calculator will help you make the calculations.

Bankrate’s content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate’s Terms of Use.

Read more Driving for Dollars columns and Bankrate auto stories. If you have a car question, e-mail it to us at Driving for Dollars.