Best Home Equity Loan Comparison

While several loan providers in the market offer mortgages at competitive rates, we will look at those lenders that are the best in their category. Let's start!

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The information shared through this website is based on our team’s personal judgements and views. We use our own comparisons to assign values, which are not intended to reflect a certain benchmark of precision. To keep our website free for use, we accept referral fees from various service providers, which have the potential to influence their respective appointed scores. A third party’s participation on toploansadviser.com is not an indication of endorsement. The information and vendors which appear on this site is subject to change at any time.The site does not include all companies offering loan products or all available loan offers.

SunTrust-Best for Quick Approval

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9.8
Trustpilot
  • Min. Credit Score: 620

  • APR: 4.64% - 18.0%

  • Loan Amount: $10,000 - $500,000

The first lender on our list is SunTrust, a bank that offers home equity lines of credit instead of home equity loans. With the loan APR from 4.64% to 18.0%, SunTrust offers lines of credit ranging from $10,000 to $500,000 over 10 to 20 year repayment periods. It takes them only 24 hours to get back to you with the approval results so, if you’re looking for a quick solution, SunTrust should be at the top of your list. You can also choose between fixed or variable-rate repayment options, as well as access funds via mobile banking, online banking, variable-rate check or at a physical location. When it comes to eligibility, SunTrust requires you to have at least the minimum credit score of 620.

Pros:
Quick approval time
The ability to choose between fixed and variable rates
Plenty of ways to access funds
They do not charge closing costs if your account has been open for more than three years.
Apply for eligibility online
They have a low CFPB complaint ratio for its home equity products
Cons:
They do not offer home equity loans
If you repay your balance early, you may have to pay for closing costs
2

Spring EQ-Best for Fair Credit

9.6
  • Min. Credit Score: 680

  • APR: Starting at 5.205%

  • Up to $500,000

Going by the slogan “Mortgages made easy,” Spring EQ offers simplified home equities where you can access 97.5% of your home’s value in pure cash. Spring EQ allows you to borrow up to $500,000 with an APR starting at 5.205%. Given the great services they offer, Spring EQ requires you to have a high credit score of at least 680. A credit score of 740 would be ideal if you’re aiming for 90% of your property’s value. They offer different repayment periods of up to 20 years.

The good thing about Spring EQ is that they keep the approval time at a minimum and get back to you as soon as possible after you submit an application. They also offer fully online applications so you don’t have to leave the comfort of your home to start your loan application process. Overall, Spring EQ makes home equity loan application quick and simple — as long as you meet their credit score requirements, you’ll be good to go!

Pros:
Fast approval and funding access
Plenty of flexible funding options
Competitive interest rates
Easy to apply
Cons:
They don’t offer any HELOC options
They charge an appraisal fee, along with administration fees
3

Citizens Bank-Best for Flexible Loan Amounts

9.5
  • Min. Credit Score: 580 - 620

  • APR: 3.0% - 21%

  • Loan Amount: $100,000 - $200,000

Next up is the Citizens Bank, which offers an APR ranging from 3.0% to 21%. Their loan amounts are significantly lower compared to SunTrust, ranging from $10,000 to $200,000+. On that note, they also offer shorter terms than SunTrust with the repayment periods ranging from 10 to 15 years. Although the Citizens Bank has proven to be a good option for many people looking into home equity products, the downside here is that they don’t disclose much information upfront. You’ll have to get in contact with them to discuss your particular situation.

The good thing about Citizens Bank is that they offer a variety of home equity products including the home equity loans, standard home equity lines of credit, and the Citizens GoalBuilder HELOC. It’s important to note that you can secure a 0.25% rate discount on your loan if you have a Citizens Bank Checking account. When it comes to eligibility, the bank does not disclose the exact credit score you need to have in order to qualify for their home equity products. However, they do mention eligible properties, which include owner-occupied family properties and condos. Investment properties not occupied by the owner, as well as mobile homes, manufactured homes or properties on sale are not eligible.

Pros:
Variety of home equity products available
0.25% discount for Citizen Bank account holders
Cons:
Investment homes, mobile homes, and manufactured homes are not eligible for home equity loans.
There’s a $50 annual fee after the first year on standard HELOCs (Home Equity Lines of Credit)
Credit requirements are not disclosed for home equity products
4

PNC Bank-Best for Home Equity Loans and Lines of Credit

9.3
  • Min. Credit Score: 580 - 620

  • APR: -

  • Loan Amount: -

The last option on our list is the PNC Bank, which we rank as the best option for home equity loans and lines of credit. The reason behind this are very low rates of as little as 3.09%. Moreover, the PNC Bank allows you to choose from more flexible repayment periods of 5, 10, 15, 20, or even 30 years. However, we must address that there is an origination fee required when taking out a loan and it can range from $12 to $250, depending on your loan.

The PNC Bank is a very popular choice when it comes to home equity solutions. They operate in 2 400 locations across 21 states and the District of Columbia. With that said, PNC Bank is the go-to option for many people looking for home equity loans. They also offer a home equity rapid refinance product that may come in handy later down the road. Lastly, it’s important to mention that the PNC Bank loan limits go from $1,000 to $150,000. Naturally, you need to have a good credit score to qualify for the loan, or at least meet the 620 minimum bar.

Pros:
Low interest rates starting at 3.09%
Multiple options for loan repayment period length
Popular and reliable choice
Cons:
Origination fee required.

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FAQ About Home Equity Loans

As we’ve explained at the beginning of this article, a home equity loan is essentially a loan borrowed against your ownership in a property. Equity stands for how much of the property you actually own, financially speaking. To calculate your equity in a property, divide the market value of the home with the amount you owe on your mortgage. Now, equity loans operate as a second mortgage, which means that taking out this loan would put your home at risk of foreclosure in case you fail to make the agreed payments.

It’s important to address that home equity loans are not the same thing as a home equity line of credit. In short, home equity loans provide a one-time amount at a fixed interest rate. A HELOC on the other hand is a revolving source of funds that can operate like a credit card - you can access the funds whenever you need them. Equity loans are offered by banks and other financial institutions, which means you can choose from many types of home equity products out there.

Pros and cons of home equity loan

Here are some of the benefits of leveraging home equity loans:

Home equity loans come at a fixed interest rate, meaning you’ll know upfront how much money you’ll have to pay in interest. This makes home equity loans a safe option regardless if the interest rates rise or fall.

Home equity loans typically have lower interest rates compared to personal loans because you have a property that serves as collateral.

The interest payments on your home equity loan may be tax deductible (depending on whether you qualify to deduct your payments).

You will receive the loan amount in a lump sum, which can help you cover large expenses (depending on your needs).

As much as home equity loans may seem like a good idea, there are always downsides to consider. Here are a few:

You’ll have to pay the interest rate on the entire loan amount, regardless of how you choose to use the money (as a lump sum or in smaller increments).

Home equity loans offer less flexibility compared to HELOCs.

By taking out a home equity loan, you will have two mortgages to pay off (make sure you can afford it).

If you fall behind on your monthly payments, you’ll risk losing the property.

What Are the Home Equity Loan Alternatives

Before you opt for a home equity loan or a HELOC as your preferred way of borrowing money, make sure to familiarize yourself with the alternatives out there. If home equity loans are not a good option for you, consider one of the following:

1. Cash-out refinancing: This method refers to taking out a new home loan for more money than the amount you owe on the original mortgage. This allows you to repay the first mortgage and keep the difference so you don’t have two mortgages on your shoulders.

2. Reverse mortgage: A reverse mortgage is a type of mortgage available to homeowners of 62 or more years of age. This mortgage allows them to convert home equity into cash in order to supplement the retirement income.

3. Personal loan: A personal loan is pretty easy to get if you have a good credit score and it can be used for anything. However, keep in mind that personal loans have much higher interest rates compared to home equity loans.

4. Debt consolidation loans: With a debt consolidation loan you can combine multiple high-interest debts that you owe and turn them into one new loan to reduce your interest charges and make the repayment process a little easier.

How to Choose the Best Home Equity Loan

When looking for home equity loans, your goal should be to find the lowest interest rate possible in order to save some money in the long run. Start by looking into the changing interest rates and how they’re behaving based on the current economic conditions. Monitor the trends to see what you can expect later down the road. Don’t hesitate to consult with a financial advisor or the bank to find out whether your variable interest rates will go up or down in a few years.

Another thing that can help you get the best out of home equity loans is improving your credit score ahead of time. The better your credit score, the better interest rates you’ll score, meaning you’ll be paying less money in the long run. You can improve your credit score by paying bills on time, paying down any existing debris, and avoiding opening too many credit cards. Last but not least, make sure to look at all of your options before settling down for one lender. In many cases you’ll be able to find better rates if you just take the time to research multiple lenders and get in touch with them to discuss your particular situation.

Conclusion

Before choosing which type of loan to go with, it is vital to have knowledge of the lenders that are in the industry offering loan product. Due diligence is needed to know about the loans offered and the expenses attached to them.

Borrowers also should keep a check on their credit score to be aware that they follow within the minimum guidelines of home equity loan providers. It is crucial to know the type of loan one can afford to pay and which lender best fits them.

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