Quote from @Angel Dejesus:
Awesome thanks had to do extensive research as the banker confused the hell out of me or was just trying to sell me a refinance. But your right this lender was very hesitant as i mentioned i wanted the funds to buy another investment and or hold as an emergency for when something pops. Id Rather deal with private funding. Now since you mentioned Property lines of Credit or Business lines of Credit are we talking about Credit cards? I have over 100k in 0% credit otherwise i would use that just like the equity i have in some property id rather use that first instead of credit cards. This does make sense what do you suggest?
Angel
Hey Angel,
The terminology can definitely get squirrely. Jackson nailed the answer to your first question.
A HELOC is a line of credit using real estate as collateral.
A credit card is a line using your credit as collateral (nothing).
A business line of credit uses your business as collateral.
A "PAL" or pledged asset line is a line of credit that uses your investments as collateral.
Etc.
All of them share in common that they are a line of credit; you draw what you need and only pay interest on what you use.
Traditionally, lines of credit that have collateral are going to have much lower interest rates than those that don't, like credit cards, because in the event of default there is nothing to seize. That's why the average credit card rate is in the 20s. But as a short-term solution, playing the 0% credit card game can be an option, but from my experience, juggling from one to the next with no backup plan often ends in paying high interest in the long run. Credit card companies are for profit; they're offering 0% for a reason, after all!
Which option is best will be individual to you. Happy to chat options—feel free to connect.
