The best home equity loan lenders offer a wide range of loan amounts and terms at competitive interest rates. They’re transparent about what they can and can’t offer you. And they have a solid reputation for customer satisfaction.
Unfortunately, finding a lender that offers home equity loans can be significantly harder than finding a lender that offers purchase loans, refinance loans, or home equity lines of credit (HELOCs). While you can’t use Credible to find a home equity loan, we’ve identified six companies that do offer these loans and reviewed the pros and cons of each one.
Best home equity loan lenders
No single home equity lender excelled across the board on the criteria we evaluated. Each has its strengths and weaknesses. You may have to compromise in some areas, but you may still be able to find a good loan for you by shopping around.
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Northpointe Bank
Best for: Competitive interest rates
Based in Grand Rapids, Michigan, Northpointe Bank offers banking, home lending, and insurance services. The bank opened in 1999 and has 64 branches across the U.S.
Pros
- Competitive interest rates relative to other big-name lenders
- Loan amounts from $10,000 to $250,000
- Claims a 97% customer satisfaction rate based on its own survey
Cons
- Not available in all states
- Doesn’t disclose maximum combined loan-to-value (CLTV), terms, or closing costs
- Doesn’t provide as much information as applicants might want
Spring EQ
Best for: Fast closing time
Based in Philadelphia, Spring EQ calls itself one of America’s fastest-growing lenders with a leading-edge digital process. In a best-case scenario, Spring EQ claims you can close on your home equity loan and receive your cash in 11 days. On average, the company says its customers get their cash in 18 days.
Pros
- Fast closing
- CLTV up to 97.5% with a credit score of at least 740
- Simplified application process
- Apply online
Cons
- Closing costs are $799 plus third-party fees
- Rates start at 6%
- Minimum loan is $25,000
- Not available in all states
Discover Home Loans
Best for: Low rates with no closing costs
Discover is best known as a credit card company, but it offers home equity loans and other financial services, too.
Pros
- No origination, application, or other closing fees
- Apply, submit documents, and view your loan status online
- 10-, 15-, 20-, and 30-year terms
Cons
- Best rate requires no first mortgage and a $200,001 loan
- Minimum loan amount is $35,000
- Maximum loan amount is $300,000
Check Out: Using a Home Equity Loan or HELOC to Pay Off Your Mortgage
TD Bank
Best for: Borrowers with high property values
TD Bank is one of the largest banks in North America, offering a range of banking, savings, and borrowing options — including home equity loans — in the United States and Canada.
Pros
- Loan amounts start at $10,000
- Lends to borrowers with properties worth $2.5 million and up
- Location-based rate quotes available online
Cons
- Doesn’t disclose CLTV requirements
- Must call for more information on high-property-value loans
- Not available in all states
U.S. Bank
Best for: Larger loans with no closing costs
U.S. Bank is the nation’s fifth-largest commercial bank and has been named by the Ethisphere Institute as one of the world’s most ethical companies for eight straight years.
Pros
- Loans up to $750,000 ($1 million in California)
- No closing costs
- Flexible loan terms up to 30 years
Cons
- Doesn’t disclose CLTV requirements
- Doesn’t update rates daily
- Doesn’t give location-based rate quotes
Navy Federal Credit Union
Best for: Customer service, high CLTV
Navy Federal Credit Union might be the best 100% CLTV home equity lender because most lenders have lower limits. However, like many credit unions, Navy FCU isn’t open to just anyone: You must be a current or retired member of the armed forces, or a family or household member of someone who is.
Good to know:
This lender is experiencing slow processing times right now, so if you want to work with Navy Federal Credit Union, plan three to four months in advance.
Pros
- Up to 100% CLTV with 7.99% APR and a five-year term
- Excellent Trustpilot reviews and recent customer service awards
- Transparent about offerings and weaknesses
Cons
- Military and families only
- Maximum loan term of 20 years
- Lengthy application processing and closing timelines
Methodology
To identify the best companies for home equity loans, Credible looked at data points in the following categories:
- Rates
- Fees
- Customer reviews
- Loan minimums and maximums
- Loan terms
- Maximum CLTV
- Time to close
- Limitations on who can apply
- Transparency
Credible started with a list of 44 major lenders and ruled out 36 because they didn’t offer home equity loans. Credible then gathered as much information as possible from the eight lenders’ websites to evaluate their home equity loans and chose the best six.
If you can’t find what you need from these lenders’ offerings, we recommend checking out local and regional credit unions and banks for more home equity loan options.
Check out: Have Bad Credit and Want a Home Equity Loan? Here’s What to Do
Frequently asked questions
What is a good rate for a home equity loan?
A good interest rate for a home equity loan depends on the current market and your credit score. As of 2023, rates typically range from 6% to 9%. Borrowers with excellent credit and a low loan-to-value (LTV) ratio may secure rates on the lower end, while those with lower credit scores may see higher rates.
What is the monthly payment on a $50,000 home equity loan?
The monthly payment on a $50,000 home equity loan depends on the interest rate and loan term. For example, with a 5% interest rate on a 10-year term, your monthly payment would be approximately $530. You can use a home equity loan calculator to get a more accurate estimate based on your specific terms.
What is the cheapest way to borrow against home equity?
The cheapest way to borrow against home equity is typically through a home equity line of credit (HELOC). A HELOC allows you to borrow as needed, paying interest only on the amount you use, which can save money compared to a lump sum home equity loan. Additionally, HELOCs often have variable interest rates that may be lower than fixed rates for home equity loans.
What disqualifies you from getting a home equity loan?
You may be disqualified from getting a home equity loan if you have a low credit score, a high debt-to-income (DTI) ratio, insufficient home equity (usually less than 15-20%), or a property in poor condition. Lenders also look at your ability to repay, so unstable income or employment could result in disqualification.
What is the downside to a home equity loan?
One downside of a home equity loan is that your home serves as collateral, meaning you risk foreclosure if you can’t make payments. Additionally, home equity loans typically have fixed interest rates, which can be higher than variable rates. Borrowing a large sum all at once also increases your debt load immediately, compared to a HELOC where you borrow incrementally.
Do you need an appraisal for a home equity loan?
Yes, most lenders require a home appraisal for a home equity loan to determine the current value of your home and how much equity you have. This ensures the loan amount you’re requesting is supported by your property’s value. The cost of the appraisal is often borne by the borrower.
See:
With a cash-out refinance, you can access your equity and potentially lower your interest rate all with the same loan.
