A home equity line of credit (HELOC) is a great way to get your hands on money in a hurry. As long as you have equity in your home, there is not much fear of being denied.

Despite the fact that getting your hands on this money may be an easy process, it doesn’t mean you should actually move forward. There are five reasons why avoiding a home equity line of credit may be in your best interest:

1. Unstable income. If you don’t know where your next paycheck is coming from, maybe because you work as a contractor, a HELOC is not the best idea. In the event you are unable to keep up with the payment, the lender could begin the foreclosure process.
2. You don’t want to (or can’t afford) the fees. Depending on the lender, it can be expensive to obtain a HELOC. There are fees and upfront costs to think about.
3. You don’t need that much money. A HELOC is often a good idea if you need a large sum of money all at once, such as to complete a home renovation. If you only require a small amount of money, you should probably turn to your emergency fund or a low interest credit card.
4. You are scared of an interest rate increase. Unless you have a fixed rate line of credit, an interest rate increase could come into play at some point. This is something to consider before you sign on the dotted line. Make sure you are comfortable with the current rate, as well as the “cap” set by the lender.
5. You don’t really need the money. The idea of a HELOC may excite you. After all, who doesn’t want access to extra money? But remember this: the money is not free. You are borrowing against the equity in your home, while also paying interest. If you don’t need the money right now, forget about a HELOC for the time being.

These are some of the many reasons to avoid a home equity line of credit. Now, here is the next big question: what are some of the top reasons to apply for a HELOC?

There are several places you can turn when your business is in need of money. Since this decision will impact your company in many ways, it’s critical to take your time.

Some business owners make the mistake of borrowing money from a loan shark or hard money lender. It sounds like a reasonable idea upfront, until you find that the terms and conditions are slanted heavily against you.

Rather than make a poor decision that could affect your business for many years to come, turn your attention to the benefits of a term loan. There are hundreds of online and brick and mortar financial institutions that offer these loans, among many other types.

Here are some of the most appealing benefits of a term loan:

• Competitive, fixed interest rate: When compared to borrowing from a loan shark, you’ll find that your rate is much lower. This allows you to save hundreds or maybe even thousands of dollars. Furthermore, with a fixed rate, there are no concerns about your payment changing from month to month.
• Variety of terms: Term loans typically range from 12 to 84 months, giving you the flexibility to choose the option that best suits your budget.
• Fast funding: If you supply everything the lender requires in a timely manner, you’re likely to receive a decision within 24 to 48 hours. If approved, you can sign the final documents and immediately get your hands on the money.
• Peace of mind: It’s stressful to enter an agreement with a loan shark, as you never know how they’ll take advantage of you. Not to mention the fact that you put yourself in harm’s way should you be unable to repay the money. Conversely, you’ll have peace of mind when you borrow from a reputable lender.

These are just a few of the many benefits of a term loan for your business. If these pique your interest, contact three to five lenders to learn more about what’s available to a borrower in your position.

No matter how hard you try, you could find yourself dealing with a bad loan at some point. Maybe you’re in this position because you were in a hurry for money. Or maybe you’re in this position because you didn’t fully understand the terms and conditions of the loan.

Understanding the potential impact of a bad loan will help push you toward an informed decision. Here are three things you should concern yourself with:

• The high cost: For example, if you opt for a payday loan, the high cost of borrowing is likely to bite you at some point. These loans are known for extremely high interest rates, thus taking money right out of your pocket.
• Increased stress level: It’s bad enough when you’re facing an uphill financial battle. If you add a bad loan into the equation, your stress level will reach new heights. Unfortunately, things often remain this way until you’re able to pay back the loan.
• A more complex financial situation: When attempting to overcome financial difficulties, it’s important to simplify things as much as possible. A bad loan will do the exact opposite. It’ll complicate your finances, stress you out, and could even lead you to make more poor decisions.

If you’re currently dealing with the impact of a bad loan, make a list of the many ways to save yourself. It may not be easy, but there’s a strategy you can employ to reach your goals.

Conversely, if you’re concerned about making a mistake when taking out a loan, compare the pros and cons of each product. For example, a close look at the drawbacks of a payday loan will soon have you considering a more reputable financial tool.

Don’t let a bad loan impact your finances and personal life. Even if you’ve made a mistake, there are changes you can make to get back on track.

It doesn’t matter if you’re applying for your first credit card or have many years of experience using this financial tool, it’s critical to take the necessary steps to protect yourself.

The best thing you can do is review the terms and conditions of a credit card before completing the application. This will give you a clear idea of what you’re getting, what you’re not getting, the benefits, and the potential drawbacks.

Here are some of the more important questions to address:

• What is the interest rate? The answer to this question will give you a clear idea of if the credit card issuer is trying to take advantage of you. Although there are regulations in place to keep rates in check, it doesn’t necessarily mean you’re getting what you deserve.
• Can your interest rate change? Don’t assume that your credit card has a fixed rate attached to it. If it’s variable, you may find it changing more often than you would like. Also, there may be reasons why your issuer can increase your rate, such as if you miss a payment.
• Do you understand the fee schedule? There are fees attached to every credit card, so make sure you know when these come into play. For example, a late fee is charged if you fail to make the minimum payment by the due date. Foreign transaction fees are charged if you use your credit card out of the country. When you understand the potential fees, it’s easier to avoid paying them.

Unlike a loan shark or payday lender, credit card companies must comply with many federal regulations. While this protects you to a certain degree, you could still find yourself stuck with a card that’s not in your best interest.

What process do you follow to review the terms of a credit card before applying? Would you add any other questions to the three above?