TD Bank's first Consumer Borrowing Index found that only about half of Home Equity Line of Credit borrowers are using their loan for home improvements.
Nearly 30% of the 1,364 borrowers surveyed for this study said they took out their loan for debt consolidation, while nearly a quarter took their HELOC out for major home purchases.
The next highest given reasons were education, at 20%, and emergency funds, at 19%. On average borrowers got an $87,000 credit line, although 30% applied for $100,000 or more.
"We're seeing an increasing interest in HELOCs this year, suggesting a rebound in consumer confidence related to rising home values," Michael Kinane, head of mortgage and consumer lending products for TD Bank, said in a press release.
Respondents were randomly selected by independent research firm Vision Critical using demographic parameters determined by the Census Bureau's American Community Survey. An interesting age division arose in the study, with most millennials surveyed, 59%, responding that they believe HELOC interest rates are higher than those for student loans, and 43% believe that HELOC rates run higher than credit card rates.
