Home Equity vs. Auto Loan

Compare using a home equity loan versus an auto loan to finance your vehicle purchase.

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Shared Inputs

$

Auto Loan

%
60 months
Monthly Payment$587
Total Interest$5,219
Total Cost$35,219

Home Equity Loan

%
120 months
Monthly Payment$356
Total Interest$12,733
Tax Savings$0
Net Cost$42,733

Best Option

Auto Loan$7,514

A home-equity loan used to buy a personal vehicle does not qualify for the home-mortgage interest deduction. This comparison applies no tax benefit to either loan. The home secures the equity loan.

How it works›

Model and assumptions. Compares financing alternatives using their entered interest rates, rebates, fees and terms. Payments use standard amortization and total cost includes the modeled upfront adjustment. Different collateral, tax eligibility and lender underwriting are outside the numerical comparison.OpenStax: annuity formulasCFPB: auto loan guide