There really are not any benefits to keeping the home equity loan. Assuming the interest is deductible, from a tax standpoint, you can achieve the same tax deduction by other means, such as charitable giving. Giving money to charity to achieve a tax deduction does a lot more good than giving money to the bank for the same purpose. The loan adds to your monthly budget needs to keep up with the payment. If you feel you need the equity loan for emergencies, then something is wrong in your financial plan. You should have an emergency fund saved in cash, and if you do not have one, your financial plan should be adjusted accordingly.
Pay down the debt on your home equity loan but don't necessarily close it out. It can act as an additional emergency fund where you can get cash from if things get tight.
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