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The Best Home Equity Loan Providers

The 5 Best Home Equity Loan Providers

Where Can You Go to Find the Best Home Equity Loans?

With interest rates at historic lows, it's a fantastic time to borrow money: to pay off credit card debt, invest in your child's education, make home improvements, or splurge on that big-ticket item you've always wanted.

There are two ways to take out a home equity loan: as a cash-out refinance of your current mortgage or as a standalone second loan. Depending on your circumstances - how much equity you have in your home, the terms of your current mortgage, credit score, and so on - you may find that one approach works better than the other.

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2021 Home Equity Loan Provider Reviews

Discover Review TopConsumerReviews.com Best-In-Class Blue Ribbon Award 5 Star Rating

Discover

5 Star Rating TopConsumerReviews.com Best-In-Class Blue Ribbon Award

You're probably already familiar with Discover as a credit card company, but you might not know that they're an excellent choice for your home equity loan. If you want a lender with complete transparency, no fees, and a wide range of terms to choose from, look no further than Discover. They earn our highest recommendation.

US Bank Review 4 Star Rating

US Bank

4 Star Rating

US Bank gives you fantastic interest rates and transparent fees when looking for a home equity loan. Although you'll need to speak with a representative to get an offer tailored to your situation, you can rest assured that this is a reputable, reliable lender that can help you borrow the money you need.

SoFi Review 3.5 Star Rating

SoFi

3.5 Star Rating

SoFi is known as a lender for many types of loans, from personal to mortgages, but they pass along any customers looking for home equity loans to a partner company, Spring HQ. Spring HQ has a solid reputation, and their interest rates were lower than some of their rivals. However, funding your loan may take three weeks or more, and you'll have to speak with a representative to complete the application process.

LendingTree Review 3.5 Star Rating

LendingTree

3.5 Star Rating

LendingTree gives you the chance to see offers from multiple lenders, helping you get the best rate on your home equity loan. You'll have to give them enough personal information to verify your identity, and then you'll be matched with up to five companies in their network. People have complained that they got a lot of unsolicited emails, calls and texts after using LendingTree's referral service. Plus, you'll still have to take the extra step of choosing a lender and going through their application process.

Figure Review 2 Star Rating

Figure

2 Star Rating

Figure is one of the newer lenders in our review. Their application process is 100% online, and they promise approval within minutes and funding in as few as five days. However, their interest rates and fees were much higher than we expected, and their "F" rating from the Better Business Bureau was the clincher when giving this company our lowest ranking among providers of home equity loans.

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Shopping around for the best rates on your home equity loan is a wise idea - don't just go to your current lender and assume they'll give you the lowest interest rate or best terms! It's worth your time to consider multiple lenders; even a difference of a few tenths of a percent can save you thousands of dollars in the long run, and some companies will reduce their fees or eliminate them completely just to earn your business.

Fortunately, the internet makes it effortless to compare your options with just a few clicks of the mouse. Many lenders provide their rates upfront, so you'll know if they're worth considering before you even begin an application; others may do a "soft pull" on your credit history, so that they can offer personalized rates based on your specific situation. Plus, some lending platforms give you the ability to compare offers from multiple banks with a single online form, saving you time while connecting you with the best rates on the market.

As you decide which provider to use for your home equity loan, there are several factors that can guide your choice:

  • Transparency. How easy is it to see the current interest rates for home equity loans? Does the company disclose all of the fees involved with applying for a loan? Can you access this information without a soft credit check?
  • Ease of Use. Do you have to jump through a lot of hoops to get rates tailored to your needs and credit history? How complicated is the application? Can you complete the entire process online, or will you have to speak with a representative?
  • Reputation. What do other clients have to say about their experience with the lender? Does the company have a favorable rating with the Better Business Bureau?

TopConsumerReviews.com has reviewed and ranked the top options for home equity loans available today. We hope this information helps you get the money you need to pay down debt, start your home improvement project, or invest in a new business - the possibilities are limitless!

The Best Home Equity Loan Providers Compare Home Equity Loan Providers Compare Home Equity Loan Provider Reviews What are the best Home Equity Loan Providers Best Home Equity Loan Provider Reviews

Home Equity Loan Provider FAQ

A home equity loan is basically a second mortgage. You borrow against the amount of money you have already paid into your residence (as opposed to how much is still owed to the mortgage lender, if any). For example, if you purchased your home for $300,000 and you still owe $200,000, you have $100,000 in equity. Your loan would be based on that $100,000 you have already paid off on your home. (This also assumes that your house is still worth the $300,000 you paid at the time of purchase.)
A home equity loan usually has a fixed interest rate and monthly payment, and you get the entire amount of the loan upfront as a lump sum. A HELOC, or home equity line of credit, lets you take out money as needed up to a predetermined credit limit. However, HELOCs almost always have variable interest rates, so you could be paying more in interest depending on when you withdraw the funds.
You'll likely get lower interest rates with a home equity loan compared with a personal loan - because you're essentially taking out a loan from money you've already paid into your home. Credit card interest rates are not only extremely high, but your credit limit might also prevent you from getting as much money as you need.
Most lenders require you to have at least 15-20% equity in your home. In other words, if your home is worth $400,000, you need to owe less than $320,000 to $340,000 in order to qualify for a home equity loan. Keep in mind that these calculations are based on the current appraised value of your property, not the purchase price.
It's possible that you could face foreclosure if you don't repay your home equity loan. If you're having trouble making payments, it's a good idea to reach out to the lender and ask for a payment arrangement. Being proactive can make a huge difference and may save you from foreclosure.
That depends on the loan terms. Some home equity loans have no prepayment penalty, while others assess early termination fees: usually a percentage of the remaining balance or a certain number of months of interest. If you think there's any possibility that you'll pay off your balance before the end of the loan term, be sure to choose a lender that offers home equity loans without prepayment penalties.
This is another case of "it depends" . First, tax laws can change from year to year, impacting whether or not you can deduct the interest paid on your home equity loan. In the past, the IRS has only allowed deductions when the home equity funds are used to "buy, build, or substantially improve" the home that secured the loan. Check with your tax professional for more information.
Yes. As long as you choose a reputable lender, there's no reason you can't safely and quickly apply for your home equity loan online. It can definitely save you some time and hassle, since there's no need to go into a brick-and-mortar location to fill out paperwork.

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