Introducing Prosper’s New eBook: 4 Ways to Use a Home Equity Line of Credit (HELOC)


Today we are excited to announce the release of our new eBook, 4 Ways to Use a Home Equity Line of Credit (HELOC), which is now available to download by clicking this link: 4 Ways to Use a Home Equity Line of Credit (HELOC) eBook.

Created to address confusion around HELOCs, this free resource covers everything you need to know, including:

  • What a home equity line of credit is and how it works
  • The advantages of a home equity line of credit
  • How to use a HELOC for home improvements, debt consolidation, major purchases and even as an emergency fund

You’ll also find links to other helpful resources, including Prosper’s easy-to-use HELOC calculator, throughout this 10-page guide.

To get your free copy of 4 Ways to Use a Home Equity Line of Credit (HELOC) today, follow this link. Not in the mood to download a file? We’ve got you covered. We’ve laid out the eBook content below, if you’d prefer to read it that way.

What Is a Home Equity Line of Credit (HELOC)? 

A home equity line of credit, or HELOC, is a revolving line of credit based on the equity you’ve built up in your home. A home’s equity is the difference between the value of your home and your mortgage balance. A HELOC works like a credit card but because the line of credit is secured by your home, you can access more money at a lower interest rate than a credit card or personal loan. Keep in mind that in exchange for the lower rate, your home acts as collateral for the line of credit. 

It’s also important to know that with a HELOC, there’s a defined draw period from which you can borrow (usually 5–10 years). Once the draw period ends, you enter the repayment period (typically 10–20 years).

How Should I Use a HELOC? 

In short, you can use the funds from a HELOC for any purpose. While home improvements are among the most common uses (remember: your home is the collateral for the HELOC), you may utilize your home equity to consolidate debt or finance a large expense. 

However, before you apply, it’s important to know what you want to use your HELOC for. Here are the four smartest ways to use a HELOC. 


RELATED ARTICLES 

What is a HELOC and How Does it Work? 

Home Equity Line of Credit vs. Home Equity Loan: What’s the Difference? 

Is a HELOC a Good Idea? Great Ways to Use a HELOC During COVID-19 

How a Fixed-Rate HELOC Works


1. HELOC for Home Improvements


While there are a number of ways to pay for your next home renovation project, as a homeowner with equity, a home equity line of credit (HELOC) may be the best way to finance your home improvements. Here’s why: 

A HELOC offers increased flexibility of funds, so you can use your credit when your projects are completed and invoices need to be paid. 

You’ll have less stress as delays and unexpected costs in house projects are common. With a HELOC, you can draw money when you need should costs and deadlines change. 

Not sure which projects you want to start on first? A HELOC allows you to gradually withdraw money to pay in stages, as the work is booked and completed. 

During the draw period, you may be given the option to make interest-only payments. 


RELATED ARTICLES 

HELOC: The Best Way to Finance Home Improvements 


2. HELOC for Debt Consolidation

Homeowners who are struggling with high-interest debt may be able to use their home equity to consolidate balances. A HELOC can offer you access to a larger sum of money as an option to consolidate your debt. Here’s why a HELOC could be useful for debt consolidation: 

Lower Interest Rates: A key benefit to a HELOC is you may be able to borrow money at a lower interest rate than you pay on your current debt. The lower the rate, the more you’ll save as you pay off your consolidated debt. 

One Easy Payment: Instead of keeping up with multiple payment due dates, consolidating your debt with a HELOC helps you manage it all with one easy monthly payment 


RELATED ARTICLES 

How to Use Home Equity for Debt Consolidation 


3. HELOC as an Emergency Fund 

5 If you’re in need of cash fast, a home equity line of credit may be your best solution as a homeowner. A HELOC may offer a variety of benefits when you need access to money quickly, such as when covering an emergency situation like a roof leak or medical bill. 

A HELOC allows you access to a revolving line of credit and usually, a HELOC offers a lower interest rate and a higher line amount than credit cards or personal loans. But it’s important to understand you are using your home as collateral. You have to be mindful to only borrow what you can afford to pay back. 


RELATED ARTICLES 

How to Improve Your Financial Health During COVID-19


4. HELOC for Major Purchases 

Need to make a major purchase, but you don’t have enough in your bank account to cover the upfront cost? A HELOC may help out in that situation. Because, as stated before, a home equity line of credit can provide you access to a large sum of money, depending on how much equity you have built in your home. 

Here are some big-ticket items a HELOC can help you cover: 

  • College
  • Car
  • Vacation
  • Wedding

RELATED ARTICLES 

Wondering What a HELOC Will Cost? Try Our HELOC Calculator


Conclusion

Now that you know the smartest ways to use a home equity line of credit, the next step is to figure out if it’s the right option for you. While there are many advantages to a HELOC, if you aren’t able to pay on time, your home is on the line. That’s why it is so important to assess your financial wellness and use the funds appropriately so you can pay back the amount you owe in the time allotted. 

If you feel certain a HELOC is right for you, you may want to check how much you can borrow using a HELOC calculator. From there, you can see how much you can borrow and begin the application process. 


RELATED ARTICLES 

How to Get a Home Equity Line of Credit (HELOC) 

HELOC Pros and Cons: is a Home Equity Line of Credit Right for You? 

Your Top 5 HELOC Questions Answered

21 Ways to Save Money While Saving the Environment in 2021

There are many easy ways to save money and the environment in our everyday lives. From the laundry room to the mailbox, the grocery store to the backyard, minor lifestyle adjustments can make a big difference. And there’s no better time than now to start. 

In honor of Earth Day 2021, here are 21 tips and ideas for saving money and the environment.

1. Use a Reusable Water Bottle and In-Home Water Filter

If you’re going to make one immediate lifestyle change for Earth Day 2021, commit to ditching single-use water bottles. Currently, Americans purchase about 50 billion bottles of water a year, amounting to around 156 per person. By combining a reusable glass or water bottle with a filtered pitcher or filter attachment for your kitchen sink, you can help reduce plastic waste and save on your grocery bill. 

2. Run the Wash Only When It’s Full

It should come as no surprise that conserving water can save money while protecting the planet. (It’s why so many items on this list are about water!) So hold off on running the dishwasher or washing machine until there’s a full load. In doing so, you’ll save money on your monthly water and energy bills. Want to save even more? Most of your clothes, like delicate items made with lace or silk and dark, colorful fabrics will come out just as clean if you wash them with cold water. Additionally, according to GE, many detergents have enzymes that start to work in temperatures as low as 60 degrees, and cold-water detergent also enhances results. 

3. Use DIY Environmentally Friendly Cleaners

Speaking of dishes and laundry, many detergents are made from synthetic ingredients that are bad for the environment and aquatic life in particular. Thankfully, it’s easy to make your own aromatic household cleaners using products like baking soda, vinegar, herbs and lemon juice. By utilizing things you may already have in your pantry to quickly produce effective cleaners, you will save money and the environment.

4. Install a Programmable Thermostat

Replacing your old thermostat with a programmable model is an easy and affordable way to reduce your heating and cooling bill — one that Energy Star estimates will save you around $180 a year, on average. That’s because a programmable thermostat can be set to vary the temperature in your home depending on the time of day, whether you’re home and so on. Many programmable thermostats can even be operated with an app, meaning you can pre-heat or cool your house before you get home instead of running the HVAC unit all day.

5. Go Meatless on Mondays and More

You might be surprised to learn that the meat industry produces more greenhouse gases than the transportation industry. Making Monday — plus maybe another day or two each week — meatless, is one way we can help the environment exhale and recover from such intense overuse. As a bonus, you’ll save money too, because rice, pasta, beans, potatoes and frozen veggies are all cheaper than meat. 

6. Turn Off the Water

Do you leave the water running when brushing your teeth? Doing so wastes a lot of the Earth’s precious resources and your money too. Conserving water can save money while protecting the planet, so wet those bristles, apply toothpaste and turn off the faucet while you brush for two minutes, twice a day!

7. Stop Using Paper Towels

Instead of buying disposable paper products that hurt the environment, make use of ‘utility towels’ for spills and general cleanup duties. Tossing them in with your laundry is a less expensive and more environmentally friendly way to clean up messes in your home.

8. Eliminate Food Waste

According to a report from the National Resources Defense Council, 40% of food produced in the United States ends up in landfills. Meanwhile, 1 in 8 Americans goes hungry. It’s sad, expensive and an environmental disaster. Wasted food can also be a massive waste of your monthly budget. To avoid wasting food, make weekly menu plans and shopping lists. This will help you to shop smarter at the grocery store, buying only what you need and will consume, and all but eliminate food waste. 

9. Shop Second-Hand

The manufacturing of new clothes, furniture and other products is complicated from a fair wages and environmental impact standpoint. Instead of exclusively shopping for new items, look for second-hand goods at local thrift stores. You can also use sites like Freecycle.org and the NextDoor app to discover who in your neighborhood is giving away or selling their unwanted stuff. 

10. Unplug Your Electronics

Did you know that electricity is still flowing to your devices and appliances even when they’re turned off and not in use? It’s true! By unplugging them when not in use, you can save roughly $165 per year and help reduce carbon dioxide emissions. 

So, unplug the toaster after you’re done making your morning bagel and unplug the TV while you’re at work or asleep at night, just like you do with your vacuum once the floor is clean. It may take a while to get used to unplugging and plugging in your electronics (a power strip can make this an easier, one-plug process), but when it comes to ways to save money and the environment, it doesn’t get much simpler. 

Note: You may have to leave the WiFi router plugged in 24/7 if you have a home security system, front door camera or a programmable thermostat.

11. Reuse and Repurpose Everyday Items

In addition to shopping second-hand, you can find ways to reuse and repurpose items already in the house. For example, glass jars that once held your favorite pickles or mayonnaise can easily become cute storage containers for your child’s marble collection, a handsome tea bag holder displayed on the kitchen counter or decorative jars adorning a shelf. Here are 50 more ways to get organized by repurposing and upcycling things you may already have in your home. 

12. Buy Products That Last

It may cost slightly more at first, but when you buy a new product, choose to spend the extra money to ensure you are buying something that will last a long time. Not only will this decision save you money in the long run, it will also help keep more trash from being added to landfills. 

According to the most recent EPA data available, landfills received 29.2 million tons of durable goods trash in 2018. That means that clothes, bed sheets, diapers, and paper plates and cups accounted for nearly 20% of everything added to landfills! You can make a difference by using reusable products, switching to cloth diapers and choosing higher-quality clothes, sneakers and linens.

13. Collect Rainwater

According to Popular Science, “When an inch of rain falls, more than 1,000 gallons of water runs off the average American roof. That’s enough free H2O to supply the family inside for a few days and maybe knock a few dollars off the monthly utility bill.” 

Additionally, plant parents know that rainwater is pure hydration! It’s soft water containing more oxygen and micro-nutrients that your plants will love. When you collect some of that rainwater, you store those natural resources away for use on your houseplants, lawn, and in your garden during dry spells. Conserving water in this way can save money while protecting the planet and is a great habit to start on Earth Day 2021.

14. Stop Junk Mail

Annually, the production and delivery of junk mail uses more energy than if 2.8 million cars were left idling 24 hours a day, 7 days a week! Additionally, according to the Center for Development of Recycling at San Jose State University, each American receives 41 pounds of junk mail annually. Producing the paper for all that junk results in the chopping down of between 80 million and 100 million trees every year. That’s a huge environmental price to pay to learn about the new Buy One Get One deals at the local shoe store! Stop junk mail from arriving at your door to save the environment and maybe even save some money since you won’t be tempted to buy anything being sold to you.

15. Use Cloth Napkins

Not only will you feel a bit more elegant in your day-to-day life, using cloth napkins is also one of the simplest ways to save money and the environment. Cloth napkins can help fill up your washing machine, too, making sure you have a full load of laundry every time.

16. Insulate Your Doors and Windows

Allowing heat to escape your home in wintertime and not keeping all of the cool air inside during the warmer months is an expensive ecological mistake that can be easily fixed. One of the ways you can help the environment and save money on utility bills is by insulating doors and windows with weatherstripping. Sealing up an older home may help reduce your heating and cooling bills by more than 20% according to the U.S. Department of Energy.

17. Plant Herbs

An ambitious backyard garden project that produces tomatoes, peppers and cucumbers could save you hundreds every year in food costs. But you can also start small. Plant herbs in a window box to give yourself easy access to just the right amount of basil needed for mozzarella and tomato salads, the perfect pinch of rosemary for the perfect roast potatoes or ample cilantro for homemade guacamole. 

Not only is growing your own herbs environmentally friendly, it’s kind to your wallet, too! No longer will you find yourself spending $3 for each bundle of herbs at the grocery store, most of which you will likely end up throwing away within a few days.

18. Switch to LED Bulbs

As your light bulbs go dark, replace them with LED bulbs. While they do cost more than traditional light bulbs, LED bulbs last significantly longer and use up to 80% less electricity. The result is a potential savings of $20 per bulb. Use this energy savings calculator to see the return on investment of switching to LED light bulbs.

19. Shop for ENERGY STAR Appliances

As your old appliances come to the end of their life, shop for ENERGY STAR replacements, as greener purchasing decisions will help save money and the environment. For example, a water-efficient ENERGY STAR washing machine uses 25% less energy and 33% less water than regular washers. Over its lifetime, ENERGY STAR washing machines can save $370 in energy costs, which may ultimately help pay for themselves! 

Whether you’re in the market for a dishwasher, washing machine or water heater, buying an ENERGY STAR-certified appliance could be a smart choice because conserving water can save money while protecting the planet. You may even be eligible for a rebate when you buy ENERGY STAR products like air-conditioners, microwaves and washing machines.

20. Switch to a Bidet Toilet

Bidets are widely used nearly everywhere except in America, although that’s changing thanks to affordable new bidet attachments that are able to be easily added to most existing toilet seats. And it’s easy to see why. Bidet toilets save money and the planet by using only one-eighth of a gallon of water and requiring far less toilet paper to get clean. 

Bidets are proof that conserving water can save money while protecting the planet, because:

  • It takes 37 gallons of water to make a single roll of toilet paper.
  • 384 trees will be cut down to make a one person’s lifetime toilet-paper supply.
  • Americans spend between $40 to $70 a year on toilet paper.

21. Quit Smoking

Not only is smoking an extremely expensive habit, cigarettes pose a threat to the environment because they contain chemicals that contaminate waterways and ground soil, and harm wildlife. Additionally, discarded still-lit cigarettes can cause fires, damaging homes and land. The impact on the Earth is severe, but the real cost of smoking can be expressed through economics. The financial cost to each smoker is estimated to be between $1.6 and $3.1 million over the course of a lifetime, when you consider the out-of-pocket cost of the products plus the significant healthcare expenses caused by smoking. 

Start Saving Money and the Environment Today

These are just 21 of the many simple ways to save money and the environment by making minor lifestyle changes in our everyday lives. As we celebrate Earth Day 2021, think about: 

  • Buying fewer disposable products
  • Maximizing your laundry and dishwasher usage
  • Unplugging your electronics
  • Making your own household cleaners
  • Replacing light bulbs and appliances with more long-lasting, energy efficient models when the time comes

Read more: 11 Financial New Year’s Resolutions

What the Extended Tax Deadline Means for You

In mid-March, the Internal Revenue Service (IRS) announced an extended tax deadline for 2020 tax year filings. You may be wondering, why was the tax deadline extended? The answer will likely not come as a surprise.

The IRS delayed the familiar April 15 fed tax deadline in part because of changes to the taxation of unemployment income received in 2020. Additionally, the IRS “wanted to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic.”

To help you understand what these changes mean for you, we’ve answered your top questions about the extended tax deadline.

What Is the New Federal Tax Extension Deadline?

The federal income tax filing due date for individuals for the 2020 tax year is now May 17, 2021. There are, however, caveats to the federal tax extension deadline.

Do I Need to File An Extension?

The tax date extended automatically to May 17, 2021, meaning you do not need to file any forms or call the IRS to receive this one-month extension. Nothing further is needed to take advantage of the elongated tax filing period to prepare and file your 2020 taxes.

Is Tax Day Extended For Businesses?

No. The extended tax deadline of May 17, 2021, applies only to individual taxpayers. For freelancers and self-employed Americans, however, it’s important to note that tax day was extended for those paying tax on self-employment income. Consult a tax professional to discuss your specific self-employed and business tax filing status. 

What If I Need Tax Day Extended Beyond May 17?

The IRS allows taxpayers to apply for a federal tax deadline extension, and this year is no different. If you need additional time to file beyond the new May 17 deadline, you are able to request an extension until October 15 by filing Form 4868 through your tax professional, tax software like TurboTax or by using the Free File link at IRS.gov. 

This IRS Form gives taxpayers extra time to file their 2020 tax return. It’s important to note that this extended tax date does not stretch the due date to pay your taxes. If you will owe 2020 federal income tax, you should still plan to pay it by the new federal tax extension deadline of May 17, 2021, to avoid paying interest and penalties. Consult a tax advisor for more information.

Are My Quarterly Estimated Tax Payments Extended Too?

Quarterly income tax is generally due to be paid by individuals who receive money that’s not subject to income tax withholding and/or do not have federal income tax withheld automatically. This money may include, but is not limited to:

  • Self-employment income
  • Interest
  • Dividends
  • Alimony
  • Rental income

The new May 17, 2021, fed tax deadline doesn’t apply to any estimated quarterly tax payments you may be making throughout the year. Those are still due on April 15, 2021. 

Is the Tax Deadline Extended Further for February Winter Storm Disaster Relief?

Yes. The IRS issued a special extended tax deadline for taxpayers in Louisiana, Oklahoma and Texas. These are the states where FEMA declared a disaster in reaction to the winter storms in February. In these three states, the new deadline for filing individual and business tax returns, and making tax payments this year, is now June 15, 2021.

Do I Have More Time to Make IRA Contributions for the 2020 Tax Year?

When the IRS extended the tax deadline, it allowed individuals more time to make 2020 contributions to:

  • Individual retirement arrangements (IRAs and Roth IRAs)
  • Health savings accounts (HSAs)
  • Archer medical savings accounts (Archer MSAs)
  • Coverdell education savings accounts (Coverdell ESAs)

You also have until May 17 to take advantage of the possible tax benefits of making contributions to these accounts. 

Furthermore, May 17, 2021, is the new due date for reporting and paying the 10% tax penalty due on early distributions from IRAs, 401(k)s or other employer-sponsored retirement plans in 2020.

Does The Extended Tax Date Apply to State Taxes?

While May 17, 2021 is the new federal tax deadline, the extension does not apply to the state tax filing deadlines in 42 states (plus Washington D.C.) 

To avoid state tax penalties, it’s crucial that you check with your individual state to see when your tax filing deadline is this year.

None of the information provided above is intended to be tax advice. Please consult an attorney or tax advisor.

Read more: 11 Ideas for What to Do with Your Tax Refund This Year

Paying for Childcare and Receiving Childcare Assistance — What to Know

There’s no other way around it, having a child is expensive. It’s a joyous expense but a hefty one all the same. From formula to diapers and the pressure to save for college, you need a sound financial plan and a whole lot of love when you become a parent. And, unless you work from home and can juggle parenting simultaneously, it’s likely that you’ll also need a strategy for paying for childcare.

The Cost of Childcare

Costs vary based on location and your specific economic situation, and the math hasn’t been recalculated for a few years now, but the last time the U.S. government put an estimate on raising a child to age 17, the tally came to a staggering $233,610. It has undoubtedly only gotten more expensive. This means that paying for childcare and other non-college education costs accounts for over $37,000 on average, from birth to their 17th birthday. 

How much is that? Well, The Balance points out the staggering fact that in 33 states as well as the District of Columbia, the cost of infant care is more than the cost of in-state tuition at a public, four-year college!

With an average cost of childcare ranging between $4,000 to $22,600 annually, according to the Economic Policy Institute (EPI), paying for childcare is one of the most significant financial challenges working parents face. But there are programs that help pay for childcare, as well as personal financial strategies that could save you money on childcare costs.

5 Strategies for Paying for Childcare

Whether you’re expecting your first baby, recently became a new parent or have a full family already, you could benefit from a solid financial strategy for paying for childcare. Here are five tips to help you find money to pay for childcare — and to spend less of it while doing so.

1. Evaluate Your Budget

Most financial strategies and goals start with an evaluation of your monthly budget. Take a close look at where your money goes and where you might tighten up. Most people spend unnecessary money every month (too much takeout, unwatched streaming services, bloated cable packages, excessive heat/air-conditioning usage, etc). Those dollars could be better allocated and put to use elsewhere (toward long-term financial goals and childcare costs, for example).

2. Part-Time Childcare

Even if you’re working remotely, you may benefit from receiving childcare assistance. Enrolling your kids into childcare on a part-time basis will help keep your costs down while still affording you the time to get your work done, indulge your individual passions, clean, or simply practice the self-care needed to be a whole and healthy person and parent.

3. In-Home Assistance

Babysitting has been normalized for parents to enjoy a night out, but why not make use of the same dependable neighborhood teenagers and babysitters you have had on speed dial to help you with your childcare during the daytime. You’ll get the on-demand childcare assistance you need for a fraction of the cost of full-time childcare. 

4. Low-Cost Childcare

Paying for childcare at private preschools can give parents sticker shock. Instead, look into the churches, YMCA/YWCA and other non-profit community-based organizations in your town. These local establishments may offer a low-cost childcare option for neighborhood families.

5. Free Pre-K

As parents await the establishment of free universal pre-k, there are some options for giving your child the preschool education and socialization they need. Check out the pre-kindergarten choices in your state to discover your options for receiving free state-sponsored childcare assistance and early preschool education for your kids.

5 Ways to Receive Childcare Assistance

From tax-advantaged savings accounts and tax credits to prominent government programs, here are five ways to receive financial assistance to help pay for childcare. 

1. Dependent Care FSA

If your employer offers a Dependent Care Flexible Spending Account (DCFSA), you can set aside up to $5,000 tax-free to pay for childcare. This includes preschool, summer day camp, before or after school programs, and daycare. Depending on your tax rate, Care.com says that using this kind of FSA to pay for childcare could save you up to $2,000 a year. 

2. The Child and Dependent Tax Credit

Even if your employer doesn’t offer a DCFSA, you may still be able to take advantage of tax benefits. This specific childcare tax credit allows you to itemize up to $3,000 in childcare expenses per child per year, up to a $6,000 annual cap per family.

Care.com goes on to explain that, “Once you’ve itemized the expenses, you can take a percentage of that and apply the tax credit. Most families will see a 20% savings, which means you’ll save up to $600 if you have one child and up to $1,200 if you have two or more children.”

3. Military Childcare Fee Assistance

If you’re a member of the United States military, you may be eligible for Department of Defense childcare fee assistance to help you pay for childcare. The requirements for this program are different for each branch of service, so check to see what your branch of the military offers.

4. Childcare Subsidies

The federal government distributes money to state-run childcare subsidy programs to help low-income families pay for childcare so they can work or go to school. Check the benefits and subsidies available in your state to see how they may help you pay for childcare.

5. Head Start Programs

Head Start and Early Head Start programs exist to provide low-income families free learning and development services for children ages birth to five. If you have a child with disabilities, Head Start could be a good option for helping to prepare them to succeed in school and in life, and helping you get the childcare assistance your family needs.

Read more: 6 Lessons for Teaching Financial Literacy to Your Child

Disclaimer: None of the information provided in this email or blogs is intended to be tax advice. Please consult an attorney or tax advisor.

How to Apply for a HELOC Online, Plus 5 Benefits of an Online HELOC

HELOC stands for a home equity line of credit, and it works much like a credit card with a credit limit based on the equity you’ve built up in your home and other information from your credit profile. A HELOC is secured by your home. A lender will approve you to borrow up to a certain amount (up to $1 million with an online HELOC through Prosper) depending on the equity you have in your home and your credit profile. As you pay back what you use, you can continue to borrow from your revolving line of credit.

Applying for a HELOC online may be easier compared to the traditional HELOC application process. You can apply from the comfort of home and receive the funds directly into your bank account. This makes an online home equity line of credit the consumer-friendly option for homeowners looking to use the equity they’ve built up in their home for renovations, debt consolidation or any other purpose. 

5 Reasons to Apply for a HELOC Online through Prosper

There are many reasons why an online HELOC could be your best option when looking to utilize and access the equity in your home. Let’s look at some of the reasons to apply for a home equity line of credit online.

1. Applying Is Easy

An online application may be easier compared to traditional paperwork and an in-person trip to the bank. It can be completed in minutes, from wherever you are, simply by entering some of your financial information, such as your estimated home value and remaining mortgage balance.

2. See Your Offer Instantly

Applying for an online HELOC allows you to see your interest rate and credit limit instantly, without impacting your credit score because Prosper doesn’t use a ‘hard pull’ credit inquiry to check rates. The hard pull happens if you accept your offer.

3. Submit Your Documentation Electronically

Whereas a traditional HELOC may require physical paperwork to be submitted and signed, applying for an online home equity line of credit allows you to upload your documentation and sign electronically. 

4. Apply from Anywhere

Whether you’re still in bed, working at your desk or on vacation, you can apply for an online home equity line of credit from anywhere. There’s no need to drive to a bank branch or ever meet face to face with a lender, making an online HELOC a convenient way to access the equity you’ve built up in your home.

5. Save On Closing Costs

Some online HELOC lenders choose to cover the cost of closing on your line of credit. At Prosper, BBVA pays the closing costs1 for lines of credit between $10,000 and $500,000. Depending on the size of your line of credit, with an online HELOC through Prosper, these bank-paid closing costs could save you a significant amount of money.

Read more: Here’s Everything You Need To Know About Home Equity

1 Closing Costs: BBVA will pay for all closing costs on new home equity products with amounts ranging from $10,000 to $500,000. Credit requests for less than $10,000 or more than $500,000 shall be subject to actual closing costs incurred and permitted by law. To qualify for Bank-Paid Closing Costs, the borrower must complete a $10,000 draw requirement within 30 days which must remain outstanding for 90 days (not applicable in Texas). Bank-paid closing costs are subject to recoupment from borrower(s) if loan is paid off within 2 years (not applicable in Texas). Closing costs vary by state and typically range from $675 on a $10,000 credit line to $11,114 on a $1,000,000 credit line. Texas closing costs typically range from $935 to $7,339 depending on credit line amount.

Saving vs. Investing: What’s the Difference?

Commonly confused, both as words and concepts, saving and investing are not the same. There are similarities between the two, but let’s look closely at saving vs. investing to learn how each approach to putting money aside can help you today and in the future.

What Is Saving?

Saving is a term used for safely putting money away for short-term goals. Typically, you will not want to put your savings at risk of losing any of its value. This is because growth is not what you’re after when trying to save. Instead, you want to keep this money relatively safe, accessible and ready to use in a moment’s notice.

Some examples of savings, include:

  • Bank savings accounts
  • Money Markets
  • Certificates of deposit (CD)
  • Emergency funds
  • Christmas shopping accounts
  • Piggy banks

Having savings on hand is important, but there are questions to ask yourself before you start saving:

1. Do I have outstanding debt?

If you have credit card balances or outstanding medical bills, you should consider paying off this debt before saving money, because consumer debt often carries a rate of interest higher than that of a savings account. It would be counterproductive to save money and earn 1% interest while paying upward of 20% interest on outstanding credit card balances. Pay those off, then make a plan to save. If you can’t pay off your debt, you might consider debt consolidation. With a personal loan, for example, you can often secure a lower rate than a credit card, and you have a clear path to paying off your debt since the loan is for a fixed term — usually 3 or 5 years.

2. Can I afford to save?

Some financial experts would phrase this question as, “Can you afford NOT to save?” but the truth is that your monthly budget, expenses and income may not facilitate savings right now. Thinking critically about your spending and how to budget better could help you find additional dollars to pay down debt and then start saving.

Deciding to focus on saving goals and building an emergency fund during these uncertain times is one of the best financial new year’s resolutions to make and to stick to all year long. 

The Difference Between Saving vs. Investing

Unlike saving, investing is for longer-term goals. As a result, where the money you choose to invest goes will likely be different than where you save. This is because only money that’s not needed for years (maybe even decades) should be invested. Therefore, because it needn’t be liquid or easily accessible, money you are investing can be put into riskier vehicles than money you are saving for short-term needs and goals. 

Some common examples of investing, include:

  • Retirement plans
  • Stock portfolios
  • Real estate
  • Cryptocurrency

Being able to invest for your future is crucial to your long-term financial stability and achieving retirement goals, but there are also questions to ask yourself before you start investing:

1. Do I have adequate savings for emergencies?

Experts suggest couples with two incomes and secure jobs have savings equal to three months of expenses, whereas if one of your jobs is less than secure, it could be wise to accumulate six months of expenses in a savings account. Finally, individuals or families relying on a single income could benefit from having a full year of expenses saved for a rainy day. Whatever your current employment situation, you should consider starting/adding to a savings account before investing.

2. Am I taking full advantage of my retirement savings?

While the word ‘savings’ is commonly used when talking about putting money away for retirement, contributing to a company’s retirement plan or an IRA is actually investing because of the timetable for using these dollars and the relative inaccessibility of the money while still employed and under a certain age. For many people, the first investing they will do is through their company’s 401(k). This is because it may be tax advantageous to do so (you contribute pre-tax dollars from your paycheck, which reduces your taxable income), is a painless process (the money comes out of your paycheck automatically), and often there’s a company match, which can help accelerate your retirement savings. 

3. When will I need the money I will be investing?

Another question to ask yourself to better understand when to save and invest is, “When will I need to use this money?” If you think you may need to use the money you will be investing within the next five years, that cash should be saved and not invested. Because of market volatility, money that’s invested should remain invested for a number of years. Not giving your investments enough time to grow could cause you to realize losses that otherwise would only be “on paper.” 

4. What is my risk tolerance?

Investing usually involves putting money at risk in order to, hopefully, experience exponential growth over many years. If you’re not comfortable with the risks associated with investing, such as the aforementioned paper losses — when your account balance drops below your initial investment, you’re experiencing a loss but it’s not realized unless it is sold, meaning it could recover and turn into a gain — investing may not be for you regardless of how long you have before needing to access the money.

Investing options today are robust and can extend far beyond the stock and bond mutual funds available in your company 401(k) plan, the investment you’ve made in buying your home, and even trading individual stocks in a brokerage account. Learn how you can diversify your investment portfolio with Prosper.

Get Started

Now that you understand the differences between saving vs. investing, get started on building your emergency savings fund and look into your retirement plan options to ensure you have a financially sound future.

Read more: Tips for Saving, Investing and Managing Your Money at any Age