How Home Equity Financing Compares With Other Lending Options
Find out how home equity loans and lines of credit compare as financing options to personal loans, a cash-out mortgage refinance and credit cards.
Factors to consider when you want to borrow money
- How much do you need to borrow?
- How quickly do you need access to funds?
- Do you own your home?
- If you own your home, how long do you plan to live there?
- How close are you to paying off your current mortgage?
- Are there promotional lending offers you can take advantage of?
Personal lending options
Explore summaries of three lending options, then take a deeper dive with our articles that compare each with home equity financing.Personal loans
- Personal loans offer quick access to funds and are typically available in a variety of terms
- Interest rates usually fall somewhere between a secured loan and a credit card
- Like some other financing options, many lenders can provide some form of instant-approval and funding within just a few days
- With a personal loan you can pay for an expense, such as a vacation, with a fixed cost and expect to repay the amount you borrow within 3-5 years
Mortgage cash-out refinance
- Refinance your existing mortgage with a new, larger loan and receive the leftover balance as cash
- Typically allows you to borrow funds at the lowest interest rates possible, as the loan is secured by your home
- Keep in mind that the larger loan amount will likely increase your monthly mortgage payment and reset the term of your mortgage
Credit cards
- A new credit card can be a fast way to obtain funding with many card issuers providing instant-approval and quick access to the credit line
- Credit cards may have higher interest rates than other lending options—try looking for card promotions offering lower rates
- The card's credit limit should be considered as it may not be high enough to cover large expenses, such as a vehicle purchase, education or major home renovation
Home equity lending options
- A home equity loan (HELOAN) and home equity line of credit (HELOC) both let you to leverage the equity you've built in your home to cover a variety of expenses
- A HELOAN can be used to cover expenses with fixed costs, and typically has a lower interest rate than an option like a personal loan as it is secured by your home
- With a HELOC, you can draw funds as you need them and only repay what you use—just like a credit card
- Home equity financing can be a good option for many homeowners and usually takes upwards of 30 days before you receive cash
Home equity lending resources
Articles, tools and videos to help you explore your home equity lending options.
Why choose a HELOAN or HELOC?
Learn how the equity in your home can help you can consolidate debt, renovate your home or make a major purchase.
The home equity lending process
What you can expect during the home equity loan and line of credit process—from application to closing.
Understanding your credit score
Building and maintaining a strong credit score can help improve your lending experience.
Want help choosing?
Answer a few questions to get loan and line of credit options that best match your borrowing goals.
Get a personalized home equity quote
Estimate HELOC and HELOAN rates and monthly payments based on your home equity and borrowing needs