What is a home equity loan?

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.)

How is a home equity loan different from a HELOC?

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.

Why should I consider a home equity loan over a personal loan or using my credit card?

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.

How much equity do I need to have to qualify for a loan?

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.

What happens if I default on a home equity loan? Will I lose my house?

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.

Can I pay off my home equity loan early?

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.

Can I deduct the interest paid on my home equity loan on my tax return?

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.

Is it safe to apply for a home equity loan online?

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.

Best Home Equity Loans for January 2026

Item: The Best Home Equity Loans - Summary Reviews
Rating: 5
Author: Top Consumer Reviews

Friday, January 16th We evaluate products and services based on unbiased research. Top Consumer Reviews may earn money when you click on a link. Learn more about our process.

2026 Home Equity Loan Reviews

Where Can You Go to Find the Best Home Equity Loans? Homeownership opens doors to various financial opportunities, one of which is leveraging the equity in your home through loans or lines of credit. Two common options are home equity loans and Home Equity Lines of Credit (HELOCs).

5.0

EXCELLENT

Best Option

US Bank

Home equity loans, HELOCs, and cash-out refinance available
Loan estimate available over the phone without an application
Can borrow between $15,000 and $750,000 (or up to $1M in California)

Read Full Review

EXCELLENT

5.0

On the US Bank website

For a reliable choice in home equity borrowing, consider US Bank, an established institution with nearly a century of experience. Offering home equity loans, HELOCs, and cash-out refinancing, they can meet whatever your borrowing needs may be. Standout features include the ability to obtain a loan estimate over the phone without a full application and a recommendation tool to guide your choice. US Bank provides options for loans ranging from $15,000 to $750,000 (up to $1 million in California) and promotes full transparency with sample rates and clear terms. Despite a notable number of BBB complaints, US Bank's "A-" rating and accreditation signify reliability. If you're not sure what kind of loan you need, US Bank emerges as the top choice to guide you through the process and connect you with the right lending type for your situation.

4.5

GREAT

Great

Discover

Home equity loan and cash-out refinance available
Fees and interest rates clearly displayed
Loan amounts available from $35,000 to $300,000

Read Full Review

GREAT

4.5

On the Discover website

Discover stands out as a strong choice for your home equity loan. Offering competitive rates and a unique fee structure with no origination, appraisal, or application fees, and no cash required at closing, Discover remains a top contender. With home equity loans and cash-out refinancing ranging from $35,000 to $300,000 and several terms (10, 15, 20, or 30 years), Discover's online platform is a perfect example of customer-friendly transparency during the application process. The Rate & Payment Calculator provides even greater input prior to applying, and Discover's standing in the industry is evidenced by an "A+" rating and accreditation from the Better Business Bureau. Discover remains a reliable and competitive choice for your home equity loan.

4.0

VERY GOOD

Very Good

LendingTree

Home equity loans and HELOCs available
Loan marketplace that refers you to multiple lenders
Check out lender reviews even before applying

Read Full Review

VERY GOOD

4.0

On the LendingTree website

With over 300 trusted lending partners, LendingTree is a platform that can connect you with the home equity loan you need. Even if you don't wind up using this service to get a loan, their reviews of today's most popular lenders can help guide your decision. Over 100 million Americans have used LendingTree, leading to an "A+" and accreditation from the BBB. We can overlook the complaints from people who saw a big uptick in their phone/mail/email spam after they filled out a loan inquiry here, because the benefits far outweigh that inconvenience. Give LendingTree your attention if you want to check out multiple loan options in one shot.

3.9

VERY GOOD

Very Good

PNC Bank

Focuses primarily on HELOCs
HELOC available everywhere but Alaska, Hawaii, Louisiana, Mississippi, Nevada, and South Dakota
Refinancing available but may not be cash-out

Read Full Review

VERY GOOD

3.9

On the PNC Bank website

If you're considering tapping into your home's equity, PNC has something unique for you: the Choice Home Equity Line of Credit (CHELOC). PNC's CHELOC is really flexible, letting you choose between fixed and variable rates and even switch between them, but keep an eye on the fees charged for these changes. The intriguing option to toggle rates sets them apart, and their online tools provide a helpful glimpse of what your CHELOC could look like. With an "A+" BBB rating (and a plethora of customer complaints that are fortunately tempered by a large customer base), PNC earns a high rating.

3.5

GOOD

Good

AmeriSave

Offers cash-out refinances and HELOCs
Maximum amount on HELOC is $249,000
Loans come with closing costs and application fees

Read Full Review

GOOD

3.5

On the AmeriSave website

With over two decades of experience, AmeriSave is a seasoned player in the online lending field, having facilitated loans for more than 730,000 borrowers across 49 states, totaling over $130 billion. Offering both cash-out refinances and home equity lines of credit (HELOCs), AmeriSave gives you two ways to leverage your home's equity. While their page for each lending type provides detailed information and handy calculators, it's crucial to delve into the fine print, as there are associated fees, including application fees and third-party expenses. AmeriSave's reputation, reflected in an "A+" BBB rating and accreditation, suggests effective resolution of past issues. However, even with thousands of five-star reviews elsewhere, AmeriSave lags slightly in terms of competitiveness compared to other home equity loan options on the market.

3.4

GOOD

Good

loanDepot

Refinance or HELOC available
Can take up to two weeks to receive funds
Funded more than $275 billion in loans since 2010

Read Full Review

GOOD

3.4

On the loanDepot website

Since 2010, loanDepot has become a significant player in the lending industry, offering options like HELOCs and cash-out refinancing. If you're looking to tap into your home's equity, here's the deal: for a HELOC, check if it's available in your state, as it offers credit lines from $35,000 to $250,000. Rates and fees depend on factors like income and credit score. For a cash-out refinance, the details are a bit murky on their website. loanDepot maintains a terrific reputation with an "A+" BBB rating, but be ready for some glitches and a less-than-perfect online experience. Still, client feedback from thousands of five-star reviews indicates that loanDepot is a reputable choice, having funded over $275 billion in loans since inception.

3.0

AVERAGE

Average

SoFi^®

HELOC or cash-out refinance available
Access up to $500,000 (up to 90%) of your home's equity (HELOC)
Available in all states except AK, HI, ID, MA, MO, ND, NV, NY, SD, WV, WY, and UT

Read Full Review

AVERAGE

3.0

On the SoFi^® website

SoFi is here to empower you with a variety of financial tools and products, including home equity solutions like HELOCs and cash-out refinances. With over two million members and $50 billion in funded loans, SoFi offers a platform to strategically manage your debt, build financial security, invest, save for the future, and more. With the HELOC specifically, you can access up to 90% of your home's equity, up to a maximum of $500,000. However, be aware that this option is not available in 12 states. The application process requires detailed information, including your social security number, but rates are not disclosed upfront. Despite a solid reputation with an "A+" rating from the BBB and positive Trustpilot reviews, SoFi's lack of transparency and disclosure could impact your decision. SoFi gets a "just average" rating from us.

2.5

FAIR

Fair

Rocket Mortgage

Home equity and cash-out refinance loans available
"A+" rated and accredited by the BBB
In business since 1985

Read Full Review

FAIR

2.5

On the Rocket Mortgage website

If you're considering a home equity or cash-out refinance loan, Rocket Mortgage might catch your eye. With a history dating back to 1985, Rocket Mortgage aims to make home financing accessible as the nation's largest mortgage lender. However, the home equity loan process may leave you wanting more. Unlike some lenders, Rocket doesn't lay out any rates and terms upfront for home equity loans, and the absence of an online completion option might be inconvenient for you. Even with an "A+" rating and accreditation from the BBB, the limited information and challenges in obtaining details ahead of time make Rocket Mortgage fall below the mark. We recommend looking at other home equity loan options first.

2.4

FAIR

Fair

Figure

Only HELOC available, structured as a lump-sum initial payment with additional draws available
100% online application takes just 5 minutes
Funding can be as quick as 5 days

Read Full Review

FAIR

2.4

On the Figure website

Figure, a relatively new player in the lending market, has had over 85,000 households benefit from their loans, unlocking over $8 billion in equity for clients. Their HELOC offers a hybrid format, with a lump-sum initial payment (like a traditional home equity loan) with additional draws available. The 100% online application takes just 5 minutes, with funding potentially as quick as 5 days. However, Figure's reputation raises concerns, with a "Not Rated" status with the BBB and mixed reviews elsewhere. Limited availability in just 44 states, a requirement to be a member of specific credit unions, and issues reported by clients contribute to Figure's lower ranking compared to other home equity lending options in the market. You'd do well to check out other lenders before considering Figure for your home equity borrowing.

2.0

SUBPAR

Subpar

Quicken Loans

Will refer you to other lending partners
Part of the Rocket Mortgage family

Read Full Review

SUBPAR

2.0

On the Quicken Loans website

Looking to tap into your home's equity with Quicken Loans? The experience here might leave you perplexed as the site doesn't clearly present available options. Keep in mind that Quicken Loans mainly steers you towards cash-out refinancing and often refers you to its parent brand (Rocket Mortgage) or other lenders without specifying the type of home equity loan on offer. Expect to be directed to Rocket Mortgage or other lenders every time, making detailed customer reviews or a specific BBB rating irrelevant. For a clearer and hassle-free experience, consider exploring higher-ranked options that save you time and spare you from unwanted follow-up communications.

Continued from above...

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

Homeownership opens doors to various financial opportunities, one of which is leveraging the equity in your home through loans or lines of credit. Two common options are home equity loans and Home Equity Lines of Credit (HELOCs).

What's the difference? A home equity loan is a lump-sum loan secured by the equity in your home. Fixed interest rates and predictable monthly payments make it a stable option. The borrower receives the entire loan amount upfront, making it suitable for one-time expenses like home renovations or debt consolidation.

On the other hand, HELOCs are revolving lines of credit based on the equity in your home. Variable interest rates and flexible withdrawal options make HELOCs adaptable to ongoing or unpredictable expenses. Borrowers can access funds as needed, up to a predefined credit limit, and only pay interest on the amount used.

A third option is a cash-out refinance. In this case, you replace your existing mortgage with a new one that has a higher loan amount. The difference between your current mortgage amount and the new one is taken out as cash that you can use for any purpose you like. Just keep in mind that you may be giving up a lower interest rate on your original mortgage, and you're going to be resetting the clock on when your home will be paid off.

Many of the lenders on our list offer both home equity loans and HELOCs, so feel free to use our information as a starting point for either loan type. And, some lenders we evaluated offer equity-based loans that are a hybrid between the two, with a lump sum distribution but the ability to make future "draws" from the original amount after you've paid back the principal.

Tempted to go to your current lender to see what you qualify for? It's not a bad idea, but we would advise you to resist the urge to jump in and commit. The rise of online lending platforms has added a new dimension to the borrowing landscape, which could get you a much lower interest rate than what your present financial institution will offer.

In the world of home equity loans, the decision-making process becomes even more crucial when interest rates are less than favorable. Whether you're considering a cash-out refinance or a standalone second loan or line of credit, factors such as equity, current mortgage terms, and credit score play a significant role.

So, how can you choose where to start the process? Use these criteria as a yardstick to measure your options:

Interest rates. Compare interest rates offered by different lenders to find the most competitive option. Consider whether fixed or variable rates better suit your financial preferences.
Fees and closing costs. Assess the fees and closing costs associated with each lender to understand the total cost of the loan.
Loan terms and flexibility. Evaluate the terms and flexibility of the loan, including repayment periods and options for early repayment without penalties.
Customer support. Consider the quality of customer service and support offered by each lender. Responsive and accessible customer service can be crucial throughout the loan process. Reading through client reviews and ratings is a great way to see how well the lender's representatives are doing at managing clients' needs and concerns.

Whether economic times are a boom or a bust, there's a home equity loan out there that's right for you. The experts at Top Consumer Reviews have carefully evaluated the best of today's top lenders, to help you get the money you need with loan terms that you can afford.