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Compare Home Equity Loans

What is a home equity loan?

Home equity loans give homeowners the chance to borrow a lump sum of money using the equity in their home as collateral. Typically, home equity loans have fixed interest rates that don’t change for the duration of the loan. However, some lenders also offer variable rates.

How do home equity loans work?

Home equity loans usually have lower interest rates and more competitive terms than personal loans and credit cards. This is because they use the equity in your home as a security. Equity is the value of your property minus the money you owe on your mortgage. In most cases, the monthly payments are fixed throughout the term of the loan. However, if your home equity loan has a variable rate, the rates could vary according to changes to the prime rate. The prime rate is the benchmark rate published by the Wall Street Journal that is widely used to determine the variable rates of home equity loans.

What are the most popular uses for home equity loans?

Homeowners often use home equity loans to pay for home improvements, consolidate debt, purchase an investment property, or go on a special vacation.

Home equity loan requirements

The maximum amount you can borrow from a home equity lender is usually limited to 85 percent of the equity in the home. This is called the loan home to value ratio. To illustrate, if your home is worth $300,000 and you owe $100,000 on the mortgage, you may borrow up to $155,000. The risk with home equity loans is that if you stop making payments on your home equity loan, the lender could foreclose on your home.

Home equity loan rates

Usually, you can get much lower rates with a home equity loan than a personal loan or credit card. This is because home equity loans don’t have to rely on the personal credit of borrowers. If the borrower defaults, they can take possession of the home. This reduces the risk for the lender who can afford to offer lower rates. Interest rates for home equity loans are particularly attractive when mortgage refinance rates rise, and other sources of credit become more expensive.

Who benefits from a home equity loan?

Homeowners with considerable equity in their home who don’t want to or can’t refinance their mortgage are the ideal audience for home equity loans. They are particularly attractive to homeowners who know how much money they need to borrow and want it in one lump sum. Home equity lines of credit are a better option for borrowers who don’t know how much they will need and prefer to have access to a line of credit.

Home equity loans for bad credit

One of the biggest attractions of home equity loans is you don’t need good credit to qualify for one. Home equity loans are a good option for borrowers with bad credit who are confident they can afford the payments.

How to compare home equity loans?

Don’t just check the interest rates of a home equity loan. Lenders also charge fees to cover the overhead costs of processing a loan.  These fees include annual maintenance fee, membership, participation fees, and transaction fees. They and get expensive fast. Ask multiple lenders for a detailed estimate of the loan’s interest and fees. The Truth in Lending Act requires lenders to disclose the APR, charges, and payment terms. Calculate the overall cost, the length of the term, and the monthly payments. Rinse and repeat for each potential lender. SuperMoney’s comparison tools allow you to filter lenders and loans based on key factors, such as the loan amount, eligibility criteria, interest rates, and terms.

Compare Home Equity Loans

What is a home equity loan?

Home equity loans give homeowners the chance to borrow a lump sum of money using the equity in their home as collateral. Typically, home equity loans have fixed interest rates that don’t change for the duration of the loan. However, some lenders also offer variable rates.

How do home equity loans work?

Home equity loans usually have lower interest rates and more competitive terms than personal loans and credit cards. This is because they use the equity in your home as a security. Equity is the value of your property minus the money you owe on your mortgage. In most cases, the monthly payments are fixed throughout the term of the loan. However, if your home equity loan has a variable rate, the rates could vary according to changes to the prime rate. The prime rate is the benchmark rate published by the Wall Street Journal that is widely used to determine the variable rates of home equity loans.

What are the most popular uses for home equity loans?

Homeowners often use home equity loans to pay for home improvements, consolidate debt, purchase an investment property, or go on a special vacation.

Home equity loan requirements

The maximum amount you can borrow from a home equity lender is usually limited to 85 percent of the equity in the home. This is called the loan home to value ratio. To illustrate, if your home is worth $300,000 and you owe $100,000 on the mortgage, you may borrow up to $155,000. The risk with home equity loans is that if you stop making payments on your home equity loan, the lender could foreclose on your home.

Home equity loan rates

Usually, you can get much lower rates with a home equity loan than a personal loan or credit card. This is because home equity loans don’t have to rely on the personal credit of borrowers. If the borrower defaults, they can take possession of the home. This reduces the risk for the lender who can afford to offer lower rates. Interest rates for home equity loans are particularly attractive when mortgage refinance rates rise, and other sources of credit become more expensive.

Who benefits from a home equity loan?

Homeowners with considerable equity in their home who don’t want to or can’t refinance their mortgage are the ideal audience for home equity loans. They are particularly attractive to homeowners who know how much money they need to borrow and want it in one lump sum. Home equity lines of credit are a better option for borrowers who don’t know how much they will need and prefer to have access to a line of credit.

Home equity loans for bad credit

One of the biggest attractions of home equity loans is you don’t need good credit to qualify for one. Home equity loans are a good option for borrowers with bad credit who are confident they can afford the payments.

How to compare home equity loans?

Don’t just check the interest rates of a home equity loan. Lenders also charge fees to cover the overhead costs of processing a loan.  These fees include annual maintenance fee, membership, participation fees, and transaction fees. They and get expensive fast. Ask multiple lenders for a detailed estimate of the loan’s interest and fees. The Truth in Lending Act requires lenders to disclose the APR, charges, and payment terms. Calculate the overall cost, the length of the term, and the monthly payments. Rinse and repeat for each potential lender. SuperMoney’s comparison tools allow you to filter lenders and loans based on key factors, such as the loan amount, eligibility criteria, interest rates, and terms.

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Company

Reviews

Loan Amount

APR

Loan Term (Years)

Additional Details

Company Website

Figure

Figure

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1 total votes
Loan Amount $15K - $100K     $10K $1M
APR 5.49% - 11.25%
(Fixed APR)
    0% 18% Fixed APR
Loan Term (Years) 5 - 15     5 30
  • No Prepayment Fee
Show Additional Details
  • No Prepayment Fee
US Bank

US Bank

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Loan Amount $15K - $1M     $10K $1M
APR 4.89% - 18%
(Fixed APR)
    0% 18% Fixed APR
Loan Term (Years) 5 - 30     5 30
SunTrust Bank

SunTrust Bank

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Loan Amount $10K - $500K     $10K $1M
APR 5% - 18%
(Fixed APR)
    0% 18% Fixed APR
Loan Term (Years) 5 - 30     5 30
  • No Prepayment Fee
Show Additional Details
  • No Prepayment Fee
loanDepot

loanDepot

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Loan Amount $35K - $250K     $10K $1M
APR 4.684% - 18%
(Fixed APR)
    0% 18% Fixed APR
Loan Term (Years) 10 - 30     5 30
  • No Prepayment Fee
Show Additional Details
  • No Prepayment Fee
PenFed Credit Union
Loan Amount $10K - $400K     $10K $1M
APR 5.34% - 18%
(Fixed APR)
    0% 18% Fixed APR
Loan Term (Years) 5 - 20     5 30
Navy Federal Credit Union
Loan Amount $10K - $500K     $10K $1M
APR 4.87% - 18%
(Fixed APR)
    0% 18% Fixed APR
Loan Term (Years) 5 - 20     5 30
  • No Origination Fee
  • No Prepayment Fee
Show Additional Details
  • No Origination Fee
  • No Prepayment Fee
Patch Homes

Patch Homes

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Loan Amount $10K - $150K     $10K $1M
APR 0% Fixed APR
Loan Term (Years) 10 Loan Term (Years)
  • No Prepayment Fee
Show Additional Details
  • No Prepayment Fee