Current HELOC Rates in Minnesota Today
MINNESOTA HELOC RATES TODAY
Current HELOC rates in
Minnesota.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare HELOC rates in Minnesota.
Key Points
• Minnesota homeowners have several options for securing competitive home equity line of credit (HELOC) rates, including online lenders and local credit unions.
• A HELOC is like a credit card based on your home equity, allowing you to borrow up to 90% of your home’s value minus what is owed on your mortgage. Funds can be used for home improvements, debt consolidation, education, and investments.
• HELOC rates in Minnesota depend on the prime rate and economic factors, as well as your accumulated home equity, credit score, and income.
• To find the best available HELOC rates in Minnesota, homeowners should compare offers from multiple lenders and focus on cultivating a good credit score.
• Maintaining a credit score of 680 or higher is crucial for securing more favorable Minnesota HELOC rates, with some lenders preferring credit scores exceeding 700.
Introduction to HELOC Rates
If you’re wondering how to get equity out of your home and considering a home equity line of credit (HELOC), this guide will make your application process easier and help you get a competitive interest rate. You’ll learn the key factors influencing Minnesota HELOC rates and how to effectively utilize this information to make an informed decision. Let’s start with the basics:
What Is a HELOC?
A home equity line of credit enables homeowners to borrow against equity they’ve built in their home. You can borrow up to 90% of your home’s value, minus what you still have to pay on your mortgage. Because a HELOC works somewhat like a credit card, you don’t have to borrow the entire amount at once. You can draw money as you need it. The HELOC is secured by your home, so it may have a better interest rate than a credit card or a personal loan.
HELOCs have two phases: first the draw period, followed by the repayment period. It’s important to understand them and their differences.
The Draw Period
During a HELOC’s draw period (10 years is standard), you can access funds up to your credit limit, make payments on your balance, and borrow the money again if you want to. As a borrower, you’ll usually be required to make interest payments in the draw period, but paying back the principal may be optional.
The Repayment Period
During the 10- to 20-year period of repayment, borrowers pay off the principal with interest. Experiment with a HELOC repayment calculator for help understanding your monthly payments and overall interest.
Where Do HELOC Interest Rates Come From?
Interest rates on HELOCs are variable, meaning they change over the life of the credit line. They’re influenced by the prime rate, which is the rate banks and other lenders charge borrowers they perceive to be at the lowest risk of default.
How Interest Rates Impact HELOC Affordability
Interest rates can have a significant impact on the costs surrounding a HELOC. When it’s time to repay a $60,000 HELOC, having an interest rate of 6.00% over a 20-year term would mean a monthly payment of $430. An interest rate of 7.00% would require a $465 payment. Over the entire term, a customer with a 7.00% rate would pay $8,477 more in interest. The more you borrow and the higher your interest rate, the larger the numbers.
HELOC Interest Rate Trends
HELOC rates are tied to the prime interest rate set by banks, so getting to know the history of the average prime rate (shown in the chart and graphic below) may help you understand where current HELOC rates in Minnesota fall on the spectrum.
Since 2018, the prime rate has ranged from 3.25% at its lowest in 2020 to 8.50% at its highest in 2023. These fluctuations can have a impact on HELOC vs. home equity loan considerations, in part because, while HELOC rates are variable, home equity loan rates tend to be fixed (more on that below).
Historical Prime Interest Rate
| Date | U.S. Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Historical U.S. Prime Rates
Factors Influencing HELOC Rates
The prime rate is important, but it’s not the only thing influencing HELOC interest rates in Minnesota. A number of key factors specific to an individual borrower also matter. Understanding them can help you secure the most favorable rates for your loan or line of credit.
Home Equity
Having a sizable amount of equity in your residential property makes you an attractive prospect for lenders, potentially scoring you reduced interest rates. Homeowners typically need a minimum of 15% equity to qualify for a HELOC.
Credit Score
When it comes to securing a desirable interest rate for a HELOC, maintaining your credit score at 680 or higher is a good move. Many lenders even prefer a credit score of 700 or above.
Stable Income
Lenders look hard at your income. They are going to carefully evaluate your ability to repay the HELOC, so stability is important to them. It’s a good idea to use a HELOC monthly payment calculator to make sure you’re able to make the monthly payments.
Loan-to-Value Ratio
Most lenders require your combined loan-to-value ratio (CLTV) to be 90% or less. You can compute your CLTV by adding the existing balance on your mortgage to the amount you hope for your HELOC to be, and then dividing by your appraised home value. Here’s an example:
A homeowner’s property appraises at $500,000. They still owe $300,000 on the mortgage. They are applying for a $120,000 HELOC.
$300,000 + $120,000 = $420,000
$420,000 / $500,000 = .84 (aka an 84% CLTV)
Variable vs Fixed Interest Rates
As you read above, HELOCs often carry variable interest rates, subject to change over the loan’s duration. To begin with, variable interest rates often look lower when compared to fixed rates, but by design, they increase or decrease in accordance with market conditions.
Tools & Calculators
Time-saving online tools can assist you in calculating approximate payments and the interest you’ll pay on a HELOC. Our favorites include a HELOC interest-only calculator, which can determine the payments you’ll need to make during the draw period.
Run the numbers on your HELOC.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
How to Qualify for a Competitive HELOC Rate
A checklist for securing a competitive rate on your HELOC can help you get started. These “to dos” will help you to think about factors that lenders will scrutinize when determining your eligibility and interest rate. A solid financial standing can enhance your ability to secure different types of home equity loans and lines of credit.
Cultivate Your Credit Score
When you applied for your home loan, your credit score was paramount. Its importance when you apply for a HELOC is equal. You can build your credit score over time by paying your bills on or before the due dates. Reducing or eliminating credit card balances is also essential. Review your credit report regularly and address errors promptly.
Assess Your Home Equity
Timely mortgage payments help homeowners build home equity. Renovations not only make your home happier — they can enhance your equity by boosting the property’s value. If your home equity is in the single digits or teens, getting approved for a HELOC may be difficult.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is how much you pay monthly on debt — like student loans, a car loan, or a personal loan — divided by your gross monthly income. Home equity lenders tend to look for a DTI below 36%. Some allow up to 50%. Calculating your DTI ratio is important, as it can help you determine your eligibility for a HELOC, and whether you’ll qualify for favorable terms.
Application Process for a HELOC in Minnesota
A HELOC application in Minnesota involves several key steps. If you understand the process, your application journey will be smooth and hopefully fruitful.
Step 1. Run the Numbers
Check your credit scores, crunch your DTI, and get an estimate of your home equity before you apply for a HELOC. Some lenders have website options that let you prequalify for a HELOC online, streamlining the application process.
Step 2. Compare Lenders
Look at multiple lenders’ interest rates. Also compare qualification requirements, minimums and maximums, fees, and the lengths of their draw and repayment periods.
Step 3: Gather Your Documents
Putting together your paperwork or digital documentation is a crucial step in applying for a HELOC. Typically you need to present proof of income such as pay stubs and tax returns, documentation of your home’s value, and stubs verifying your mortgage balance . Lenders may ask for your homeowner’s insurance policy and a list of your current debts and assets, too.
If you are self-employed, a lender may ask you for a profit-and-loss statement and two years’ worth of tax returns. Having these documents prepared can make the application process go faster and boost your chances of grabbing a competitive HELOC rate.
Step 4: Submit Your Application
If you find a potential lender that offers an online HELOC application portal, it will make the process that much more efficient. You can also likely submit by phone, or in person if the lender has a brick-and-mortar branch.
Step 5: Get an Appraisal
After you submit your application, the lender will schedule a home appraisal. This is to determine the current value of your property. If your home appraises higher than your outstanding mortgage balance, there’s a good chance the lender will approve your HELOC. The appraisal process might take a few weeks.
Step 6: Prepare for Closing
Before you can access and spend your HELOC funds, you will need to sign loan documents and most likely pay some fees. Your lender may make funds available as quickly as three days following closing. Make sure you understand your loan’s terms and conditions before you sign.
Tax Benefits and Considerations
Before you can access and spend your HELOC funds, you will need to sign loan documents and most likely pay some fees. Your lender may make funds available as quickly as three days following closing. Make sure you understand your loan’s terms and conditions before you sign.
How Much Does a HELOC Cost?
HELOC’s do have costs, but they tend to be lower than those of a typical home loan or mortgage refinance, which can range from 2% to 5% of the loan amount. With a HELOC, the appraisal fee, which can reach $500, is the biggest line item. Application and administrative fees may represent additional charges. Some lenders bill for annual maintenance, as well as transaction, inactivity, and early termination fees. Some lenders may reduce or waive fees but charge a higher interest rate.
Alternatives to HELOCs
HELOCs have competition! Other financing options you could consider include home equity loans, cash-out refinancing, and personal loans. Each has benefits and drawbacks.
Home Equity Loan
Unlike a HELOC, a home equity loan hands you a lump sum. More on what is a home equity loan: Often, you can tap into up to 85% of your home’s equity with one of these. The qualification process is similar to a HELOC, requiring an appraisal.
Another factor in any HELOC vs. home equity loan comparison: You must begin repaying a home equity loan immediately, and because it will have a fixed interest rate, the payments will remain the same over the loan term of 5–30 years. Use a home equity loan calculator to get an idea of what you could borrow and compare the two options.
Here’s a quick look at the two:
| HELOC | Home Equity Loan | |
|---|---|---|
| Type | Revolving line of credit | Installment loan |
| Interest Rate | Usually variable-rate | Usually fixed-rate |
| Repayment | Repay only what you borrow; you may have the option to make interest-only payments during the draw period. | Starts immediately at a set monthly payment |
| Disbursement | Charge only the amount you need. | Lump sum |
Cash-Out Refinance
Homeowners can use cash-out refinancing as another way to leverage a home’s value. This mortgage refinance option is a good one for those who need a large sum of money at once.
When comparing cash-out refinance vs. a home equity line of credit, be sure to note that cash-out refinancing might come with a higher interest rate than other home loans. Cash-out refis draw some borrowers because they prefer to have one payment to keep track of instead of two.
Personal Loan
A personal loan has fixed payments made over 2–7 years. It can be used for almost anything and you won’t have to offer your home as collateral to get one. However, personal loans are likely to have higher interest rates than HELOCs or home equity loans.
Credit Cards
Credit cards carry steeper interest rates than HELOCs, and that factor can balloon your costs if you juggle a big balance. Credit cards are definitely handy for everyday buys, but HELOCs may be a better pick to pay for big-ticket items like a home upgrade or consolidating debt.
The Takeaway
HELOCs offer a helpful, flexible way to tap your home equity. They’re especially useful if you need to borrow money but aren’t sure exactly how much you need, since you’ll only have to pay interest on the amount you use at a given time. With good preparation and efforts to build your credit score and drop your debt level, you can submit an application that will get you a great rate in Minnesota.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
FAQ
What’s the monthly payment on a $50,000 HELOC?
An 8.00% interest rate and a 10-year term would require a monthly payment of about $607. The exact amount you’ll pay will always depend on your interest rate and loan term. The same 8.00% rate over a 20-year term would cost you about $418 per month, although you would pay significantly more total interest in the end.
Is a HELOC a smart move for you?
Whether a HELOC is a good idea at this moment depends on your financial scenario and your longer-term goals. HELOCs can help you accomplish home improvements, consolidate debt, or cover other large expenses. But it’s important to consider interest costs, fees, and the potential impact on your home equity before making a decision.
What is the monthly payment on a $100,000 HELOC?
Monthly payments on a $100,000 HELOC depends on the interest rate and length of term for the line of credit you’ve chosen. At 6.00% over 20 years, the payment would be $716 monthly. An 8.00% interest rate and the same term would mean a payment of $836.
What are the benefits of a HELOC?
A HELOC is a flexible way to borrow. Rather than taking out a lump sum, you can pull money in smaller increments according to your needs, and at a lower rate than you’d get with a credit card. Plus, you only pay interest on what you borrow.
Do you need an appraisal for a HELOC?
Yes, you do. The appraisal is crucial to the process, since it helps to establish your home’s value, and that in turn determines the amount you’ll be able to borrow. Lenders want to make sure your loan is secured by enough home equity, and will provide details on what type of appraisal is required.
What might prevent you from getting a home equity loan?
Several factors can disqualify you from getting a home equity loan. These include bad credit, a lack of equity in your home, and a high level of debt relative to your income.
How hard is it to get a HELOC?
If you can meet lenders’ requirements of a healthy credit score and optimal debt levels, and you have a minimum of 15% equity in your home, it shouldn’t be hard to get a HELOC. Hardest for many would-be borrowers is compiling the financial documents required for the application. But taking the time to do it carefully and accurately will help move your application process along.
Does HELOC affect credit score?
When you apply for a HELOC, a lender will perform a hard inquiry on your credit report. That could cause a small decrease in your credit score, but it will be temporary. Carrying a large balance on your HELOC could negatively impact your credit utilization ratio and lower your credit score, too. But if you make regular payments to your HELOC account, it will demonstrate that you can use credit responsibly. That should reflect favorably on your score.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL-Q424-033
More HELOC resources.
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What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Current HELOC Rates in South Carolina Today
SOUTH CAROLINA HELOC RATES TODAY
Current HELOC rates in
South Carolina.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare HELOC rates in South Carolina.
Key Points
• To secure the best HELOC rates in South Carolina, borrowers should have a good credit score, at least 15% home equity, and a low debt-to-income ratio.
• HELOC rates in South Carolina are influenced by the prime rate, the Fed’s policy decisions, and the local housing market.
• HELOCs can be used for home improvements, debt consolidation, and other large expenses.
• The HELOC application process involves reviewing the borrower’s credit history and getting a professional appraisal.
• Borrowers who are able to anticipate fluctuations in interest rates can make more informed decisions about the best time to apply for a HELOC.
Introduction to HELOC Rates
This guide provides an overview of HELOC interest rates in South Carolina. Our goal is to help homeowners understand all the factors influencing these rates and how to secure the best deal on a home equity line of credit. Readers will learn about the different types of home equity loans, the application process, and how to use online tools to predict your monthly payments and total interest paid. Plus, we’ll explore HELOC alternatives, such as home equity loans, cash-out refinances, and personal loans, so that you have all the information you need to make a smart decision.
What Is a HELOC?
A home equity line of credit, or HELOC, is like a credit card secured by your home equity. It allows you to borrow up to 90% of your home’s value, minus your mortgage. One advantage of a HELOC is that you only withdraw from it what you need at a given time — and you only pay interest on what you withdraw. HELOC interest rates are usually variable, meaning they can rise (or fall) with market conditions.
A HELOC has two phases: draw and repayment.
The Draw Period
During the HELOC’s draw period (usually 10 years), you can access funds up to your credit limit, make payments to pay down your balance, and borrow the money again. The borrower is usually required to make interest-only payments during the draw period, but payments toward the principal may be optional.
The Repayment Period
During the repayment period (10 to 20 years), you pay back the principal with interest in regular monthly payments. Variable interest rates can make repayment somewhat unpredictable — and more expensive if rates rise. Fortunately, a HELOC interest-only calculator can help you predict your payments during this period based on different draw amounts and interest rates, so there are no surprises.
The major risk with a HELOC is that the lender can foreclose on your home if you default. That is true with other ways to get equity out of your home, too. We’ll discuss them later.
Where Do HELOC Interest Rates Come From?
It’s not enough to know What is a home equity line of credit; borrowers need to know a little something about how interest rates work. HELOC interest rates are tied to “the prime rate,” the benchmark rate that lenders set for the most creditworthy customers. HELOC rates are also influenced by Federal Reserve decisions and economic factors. For borrowers in South Carolina, the local housing market weighs on interest rates there.
Understanding all this can help borrowers anticipate rate fluctuations and make informed decisions about the best time for a HELOC.
How Interest Rates Impact HELOC Affordability
Your interest rate can make a big difference in affordability over the course of a HELOC. For example, let’s say you have a $75,000 HELOC with a 20-year repayment term. A 1% difference in interest rate can result in $11,000 in additional interest.
As you can see from the chart below — which shows different total interest amounts based on rate, term, and amount borrowed — it pays to research the best HELOC rates in South Carolina. This table was created with a HELOC repayment calculator; plug in your numbers to see your payment and total interest.
| Loan Amount | Loan Term | Interest Rate | Monthly Payment |
|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 |
| 7.00% | $775 | ||
| 10 years | 8.00% | $1,213 | |
| 7.00% | $1,161 | ||
| $50,000 | 20 years | 8.00% | $418 |
| 7.00% | $388 | ||
| 10 years | 8.00% | $607 | |
| 7.00% | $581 | ||
| $25,000 | 20 years | 8.00% | $209 |
| 7.00% | $194 | ||
| 10 years | 8.00% | $303 | |
| 7.00% | $290 |
HELOC Interest Rate Trends
The movement of the prime interest rate serves as an indicator of future HELOC rate trends. Since 2018, the prime rate has undergone substantial fluctuations, ranging from a low of 3.25% in 2020 to a high of 8.50% in 2023. The graphic below shows a longer history of the average prime rate over the last 50 years.
Historical Prime Interest Rate
| Date | U.S. Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Historical U.S. Prime Rates
Factors Influencing HELOC Rates
Not everyone gets the prime rate. Other metrics factor into the interest rate that you’re offered, such as your home equity position, credit score, income, and combined loan-to-value (CLTV) ratio.
Home Equity
Possessing substantial equity in your principal residence makes you appear less risky to lenders, potentially leading to more favorable interest rates. Typically, homeowners must have a minimum of 15% equity in their property to qualify for a HELOC. You can estimate your equity by checking your home value with an online real estate tool, then subtracting your current mortgage balance.
Credit Score
Maintaining a credit score of 680 or higher is crucial to qualifying for a HELOC. And you’ll secure better rates with a score of 700+. A higher credit score indicates lower risk for lenders.
Stable Income
Lenders evaluate your income to determine your ability to fulfill the HELOC repayment obligations. A consistent income signifies a diminished probability of default, potentially securing more favorable HELOC rates.
Combined Loan-to-Value Ratio
Most lenders require your combined loan-to-value ratio (mortgage balance + desired HELOC amount / appraised home value) to be 90% or less, although some will allow you to borrow 100% of your home’s value. The ratio will determine your credit limit.
If your home value is $500,000, your mortgage balance is $300,000, and your HELOC balance is $120,000, then your CLTV ratio is 84%. That’s within the acceptable range.
Variable vs Fixed Interest Rates
HELOCs feature variable interest rates, which are subject to change throughout the duration of the loan. Initially, variable interest rates are lower than typical fixed rates, but they fluctuate in accordance with market conditions. It is beneficial to comprehend the distinction between HELOC and home equity loan interest rates in order to make an informed decision.
Tools & Calculators
SoFi provides numerous online tools to assist you in estimating your payments and gaining insight into the financial implications of a HELOC. Below you’ll find a home equity loan calculator as well as two HELOC calculators mentioned above.
Run the numbers on your HELOC.
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Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
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HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
How to Qualify for a Competitive HELOC Rate
To obtain the most competitive HELOC rates in South Carolina, you may need to do some advance work before applying. Focus on your credit score, home equity stake, and debt-to-income ratio. Here’s your To Do list:
Build Your Credit Score
By consistently paying your bills on time and paying down your credit card balances, you can substantially improve your credit score. A higher credit score can make you eligible for the most competitive HELOC rates available in the South Carolina market.
Assess Your Home Equity
Regular home loan payments help in building equity over time. Home equity can also be enhanced through renovations that boost the property’s value. Increased home equity can lead to better terms and higher amounts when applying for a HELOC.
Calculate Your Debt-to-Income Ratio (DTI)
Your debt-to-income ratio (DTI) is calculated by dividing your total monthly debt payments (student loans, auto loan) by your gross monthly income. Typically, home equity lenders prefer a DTI below 36%, but a lower DTI is always more favorable. A rock-bottom DTI can significantly enhance your chances of securing the most competitive HELOC rates available in South Carolina.
Application Process for a HELOC in South Carolina
If you’re concerned about whether you qualify for a HELOC, you’ll need to take extra care in preparing your application. Each of these steps plays an important role in the process.
Step 1. Crunch the Numbers
Check your credit score, calculate your DTI, and get a good estimate of your home equity before you apply for a HELOC. Some lenders offer online prequalification for a streamlined application process.
Step 2. Compare Lenders
Interest rates vary between lenders, so shop around to see what offers you qualify for with multiple lenders. You’ll want to compare not just interest rates, but also qualification requirements, minimums and maximums, fees, and the length of the draw and repayment periods.
Step 3: Gather Your Documents
When you have selected a lender, remember to gather the required documents for your HELOC application. These usually include proof of income (W-2s, tax returns), employment history (a resume), credit history, and proof of homeowners insurance. Having all this ready can expedite the application process and increase your chances of approval.
Step 4: Submit Your Application
Submitting your HELOC application can take place online, by phone, or in person. The lender will review your application and reach out if any additional information is required. Submitting a complete and accurate application will facilitate a swift approval process.
Step 5: Get an Appraisal
After submitting your application, the lender will arrange for a home appraisal to determine your home’s current value. If your home appraises for more than your mortgage balance, you may be approved for a HELOC. The appraisal is a crucial step in the process, as it directly affects the amount of equity you can access.
Step 6: Prepare for Closing
Before accessing your HELOC funds, you must sign the documents and pay necessary fees. Some lenders obligingly make funds available within three days following the closing of the HELOC loans.
Tax Benefits and Considerations
Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. Interest deductions are limited to the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). Consult a tax advisor to navigate the specific tax implications and confirm eligibility for deductions.
Closing Costs and Fees
HELOC closing costs are typically lower than home-buying and mortgage refinance costs. The appraisal fee ($150-$500) is usually the highest expense. Other costs may include application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Other lenders may waive closing costs but charge a higher interest rate.
Alternatives to HELOCs
Even if you’re leaning toward a HELOC, it’s smart to check out the alternatives. Each financing option below has its own pros and cons, which suit particular borrowers. Make sure your choice is the best one for your financial needs and goals.
Home Equity Loan
What is a home equity loan? Unlike HELOCs, home equity loans provide a lump sum amount and are paid back immediately at a fixed interest rate. Borrowers can usually access up to 85% of the equity built in their home through a home equity loan (as opposed to 90% with a HELOC). This option is suitable for those who need a specific amount of money for a one-time expense.
Review our HELOC vs home equity loan
| HELOC | Home Equity Loan | |
|---|---|---|
| Type | Revolving line of credit | Installment loan |
| Interest Rate | Usually variable-rate | Usually fixed-rate |
| Repayment | Repay only what you borrow; you may have the option to make interest-only payments during the draw period. | Starts immediately at a set monthly payment |
| Disbursement | Charge only the amount you need. | Lump sum |
Cash-Out Refinance
A cash-out refi pays off your original mortgage for more than you owe and gives you the difference as cash. If you’re considering a cash-refinance vs. a home equity line of credit, you should know that the refinance means you’ll have only one monthly payment, as opposed to two if you take on a HELOC while paying off a mortgage. A cash-out refi also means a new interest rate and loan terms. If rates have dropped since you initially financed your home, this could be good news.
Personal Loan
A personal loan is an installment loan that you pay back over a term of 2 to 7 years. Interest rates for personal loans are often higher than those for HELOCs or home equity loans because personal loans are unsecured. Some borrowers like the fact that their home isn’t used as collateral. And because you sidestep a home appraisal, the loan approval process may be faster, too.
Credit Cards
Credit cards typically come with much higher interest rates than HELOCs, which makes them more expensive if you carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, HELOCs are better suited for larger expenses such as home improvements or debt consolidation.
The Takeaway
HELOCs in South Carolina are known for their competitive rates, flexible repayment, and potential tax benefits. To secure the most favorable South Carolina HELOC rates, borrowers should possess a strong credit score, maintain at least 15% equity in their residential property, and keep their debt-to-income ratio below 36%. It’s also important to shop around with multiple lenders, since each sets their own HELOC interest rates. Just make sure to also compare fees and penalties, qualifications, and the lengths of the draw and repayment periods. If you do your homework, you’ll be well-positioned to secure the best available rates in South Carolina.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
FAQ
What is the monthly payment on a $50,000 HELOC?
The monthly payment for a $50,000 home equity line of credit depends on several factors, including prevailing interest rates and the repayment term. Assuming you draw the full amount and make interest-only payments during the draw period, your monthly payment over 20 years could range from $388 (at 7.00% interest) to $483 (at 10.00%). A repayment term of 10 years will mean higher monthly payments but less interest paid over the life of the loan.
Is a HELOC a good idea right now?
A home equity line of credit (HELOC) can be a good financial tool for homeowners with a steady income, strong credit, and ample home equity. HELOCs provide flexibility and convenience for addressing substantial expenses. However, because a HELOC is secured by your home, if you default you could face foreclosure.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 HELOC is based on how much of the credit line you have used, and on your repayment term and interest rate. If you use the entire $100,000 and pay it back at 7.50% interest over 20 years, your monthly payment would be $806. If you had a 7.00% interest rate, you would pay less: $775.
What are the benefits of a HELOC?
A home equity line of credit is a type of revolving credit, similar to a credit card. It offers numerous advantages, including flexible access to funds as required, competitive interest rates, and potential tax deductions. These financial tools can be used for a variety of purposes, including home renovations and debt consolidation.
Do you need an appraisal for a HELOC?
It’s standard practice for HELOC lenders to require an appraisal. This step determines the current market value of the borrower’s property, which is used to calculate your available equity.
What might prevent you from getting a home equity loan?
Several factors may make you ineligible for a home equity loan: a poor credit history, insufficient home equity, a high debt-to-income ratio, and unstable income.
How hard is it to get a HELOC?
The difficulty of securing a HELOC hinges on your financial situation. But if you have a strong credit score (700+), sufficient home equity (15% or more), and steady income, your odds are good. Just be prepared for a rigorous application process, and have your financial documentation ready.
Does HELOC affect credit score?
HELOCs probably will impact your credit score. When you apply for a HELOC, there is a possibility that a hard inquiry will be conducted, which may temporarily lower your score. Additionally, the HELOC can potentially affect your credit utilization ratio, which in turn can have an influence on your score.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL-Q424-050
More HELOC resources.
-
What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Is 622 a Good Credit Score?
Is 622 a Good Credit Score?
A 622 credit score doesn’t qualify as good, but it’s not bad either. It is in the fair range, which is lower than good but higher than poor. You would need to work your way up to 670 to have a good credit score. In addition, this score is almost 100 points below the current U.S. average of 717.
Here’s a closer look at what you can qualify for with a credit score of 622, why your credit score matters, and how you might build it.
Key Points
• A 622 credit score is considered fair but not good.
• Individuals with this score can still qualify for certain mortgages, personal loans, and credit cards.
• Higher credit scores provide access to better loan terms and lower interest rates.
• Building credit can enhance financial opportunities and reduce costs.
• Credit scores affect more than just loans; they impact employment, rentals, and utility services.
What Does a 622 Credit Score Mean?
Credit scores are important because they reveal how you have handled debt in the past and therefore can indicate how likely you are to repay borrowed money in the future. For this reason, credit scores typically influence a lender’s decision to approve your application.
That said, a 622 credit score is not considered to be a good one by either of the major credit scoring models. Both FICO® and VantageScore rank their good scores higher than 622. With FICO, you need a score of 670 to 739, and with VantageScore (the VantageScore 3.0 and 4.0 models), you need to achieve a score of 661 to 780.
Here’s how the most popular credit score scale, the FICO Score, looks:
• Poor credit: 300-579
• Fair credit: 580-669
• Good credit: 670-739
• Very good credit: 740-799
• Excellent credit: 800-850
Working toward understanding your credit report and building your credit score until it is good or even higher can make it much easier to qualify for more favorable loan rates and terms — including higher loan amounts and lower fees.
What Else Can You Get With a 622 Credit Score?
In addition to helping you access better lending products at more affordable rates, having a good credit score can make other areas of your life surprisingly easier. For example, while not all employers require this, some will review applicants’ credit scores. This is more commonly seen when hiring for finance-related roles. Landlords can also take credit scores into account when screening applicants. Having a high credit score and a history of making payments on time can help you stand out in a sea of applicants.
You may find your credit score is even a topic of conversation when applying for utilities like a phone plan. Your credit score can affect whether the utility company plans to charge you a security deposit and what amount that would be.
Here’s a closer look at how your credit score can impact your qualifying for financial products.
Can I Get a Credit Card With a 622 Credit Score?
If you’re considering applying for a new credit card, it’s important to know what your credit score is before you apply. That way, you can get a better idea of which credit cards you are likely to qualify for. The higher your credit score is, the more likely you are to qualify for the best credit cards on the market.
That being said, you can find a credit card with any score ranging from 300 to 850, so don’t let a low score discourage you. While you will likely enjoy less favorable interest rates and terms than a person with a higher score, having a credit card can help you build your credit score when you make timely payments and manage your debt responsibly.
When choosing a credit card, compare several options to find the one that best fits your needs.
• Pay attention to the annual percentage rate (APR), vs. interest rate, and any fees. Consider features like credit limits for balance transfers or the duration of a 0% introductory APR if you’re planning a big purchase.
• Evaluate rewards (though you may not qualify for many with a 622 score; they are typically reserved for those with a 670 or higher credit score) by looking at how you earn them and how they can be redeemed, such as for travel or statement credits. Also, check for additional benefits like travel insurance, roadside assistance, and purchase protection, and pick a card that matches your lifestyle.
If you need to pay off debt to build your credit score, you can consider applying for a credit card consolidation loan, which some borrowers find makes it easier to pay off debt swiftly. These loans can combine multiple lines of credit into a single, convenient installment loan, usually at a notably lower interest rate.
You can turn to a debt consolidation calculator to get an idea of how much money you can potentially save through the consolidation process.
Can I Get an Auto Loan With a 622 Credit Score?
Technically a 622 credit score car loan is possible, but if you can build your score to 670 or higher, you stand the best chance of qualifying for competitive auto loan terms, interest rates, and loan amounts.
Otherwise, you may pay a significantly higher interest rate for the privilege of borrowing funds, which translates into paying more over the life of the loan.
To lower the amount of interest you need to pay with an auto loan, you might make a large down payment amount. The less money you borrow, the less interest you need to pay. Many lenders reward a large down payment with a lower interest rate since they take on less risk. Consider that when applying for a car loan.
Can I Get a Mortgage With a 622 Credit Score?
Buying a home is a major financial undertaking, but having a good credit score can make homeownership much more affordable. As with auto loans, you may want to work toward a higher credit score before applying for a home loan to snag a more favorable interest rate. While some lenders will accept a score of 620 for a conventional loan, many require a higher score.
A bit about mortgages: Home loans work by charging mortgage interest as a percentage of the loan balance. This interest is included in your monthly payment, along with the principal, taxes, and insurance. Early in the loan term, most of your payment goes toward interest, but as the loan balance shrinks (starting with a high down payment can help lower this balance), a greater portion is applied to the principal. This gradual shift is known as amortization.
Finding a mortgage with a 622 credit score isn’t impossible. Here are some options if you don’t find a conventional home loan that suits you:
• FHA loan: To qualify for an FHA home loan with a 3.5% down payment, you’ll need at least a 580 credit score. What’s more, borrowers with a 500 to 579 score may also still qualify for this kind of loan. They’ll need a 10% down payment on the home.
• USDA loan: This kind of mortgage is used for homes in designated rural communities. A USDA loan doesn’t have a firm minimum credit score. According to USDA guidelines, most lenders prefer a 620 credit score, so you will likely qualify with a 622 score. You may need to provide additional documents, like housing payment history and references, in some cases, or if your score heads lower.
• VA loans: You may qualify for a VA loan, which is offered to veterans, active service members, and surviving spouses. The usual qualification is a minimum score of 620.
Can I Get a Personal Loan With a 622 Credit Score?
A personal loan is a type of loan offered by banks, credit unions, and online lenders that allows you to borrow a lump sum of money for almost any purpose and repay it over a set period with interest. It’s usually unsecured, meaning you don’t need collateral, and typically has a fixed interest rate.
One reason why personal loans are so popular is that they can be used for things like debt consolidation (as mentioned above), home improvements, paying for a wedding or vacation, or to cover unexpected expenses. That being said, choosing a secured personal loan can make it easier to qualify for this type of lending product if your credit score is on the lower side.
Like with other popular loan products, having a good credit score is helpful when applying for a personal loan. Ideally, you want a credit score in the 700s before applying for a personal loan (if your goal is to get a favorable interest rate), but it is possible to find a personal loan with a credit score of just 580.
The higher your interest rate is, the higher your monthly payments end up being. If you need help figuring out how much you can afford to borrow with a personal loan, use a personal loan calculator to crunch the numbers. You can see, for instance, how a personal loan would compare to putting an expense on your credit card and determine the best path forward.
The Takeaway
A 622 credit score isn’t a good score, but it’s not a bad or poor one either. It sits in between the good and poor categories in the fair range. You should be able to access many financial products, like installment loans and lines of credit, but you will likely not enjoy the most favorable rates and terms. By building your credit score, you can probably access better offers for credit cards, mortgages, car loans, and personal loans.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOPL-Q424-035
Is 627 a Good Credit Score?
Is 627 a Good Credit Score?
A credit score of 627 is not a good score. Rather, it’s considered fair. Borrowers with a 627 credit score may qualify for some loans and credit cards, but with less favorable rates and terms than those with a higher number.
Here, take a closer look at what your 627 credit score means, including what doors it can unlock for you — and how you might build your score to qualify for more credit products or those with more competitive terms.
Key Points
• A 627 credit score is categorized as fair, not high enough to be considered good.
• Individuals with this score can access certain loans and credit cards, though often with higher interest rates.
• Higher credit scores typically result in more favorable loan terms and lower interest rates.
• Consistently making on-time payments and maintaining low debt balances can build a 627 credit score.
• A 627 score is lower than the current average U.S. credit score of 717.
What Does a 627 Credit Score Mean?
As mentioned above, a 627 credit score is in the fair category. The fair credit score range is higher than the lowest category (poor) but lower than the good, very good, and excellent categories.
Here’s how the credit score ranges stack up:
• Poor: 300-579
• Fair: 580-669
• Good: 670-739
• Very Good: 740-799
• Excellent: 800-850
Currently, the average American’s credit score is 717, so your current score is considerably lower than that of most people. Perhaps you are new to using credit or have missed some debt payments in the past, which lowered your credit score.
As you see, the fair credit score range starts at 580 and runs to 669. If you build your credit score to 670, you’ll be in the good category of FICO® Scores (the most popular system of credit scoring). This can make it easier to qualify for loans — and to get better terms for the loans you do take out, including potentially lower interest rates.
Recommended: What Credit Score Do You Need for a Personal Loan?
How to Build Your Credit Score
Building your credit score is all about persistence and creating consistent habits that can have a positive affect on your score.
For example, your payment history accounts for fully 35% of your FICO credit score, which is the highest weight of any factor. Payment history simply refers to how often you’ve made your debt payments on time.
That means that, even without taking any other action, making on-time payments can have a positive impact on your credit score. Keeping a lower total debt balance by paying down any revolving balances you carry can build your credit score. That’s because the amount you owe versus the amount of credit you have available counts for another 30% of your score, the second most highly weighted category.
What Else Can You Get With a 627 Credit Score?
Whether or not you focus on building your credit score, a 627 FICO score can still unlock access to credit. Here’s a closer look at which types of loan products you’re likely to qualify for.
Can I Get a Credit Card With a 627 Credit Score?
Typically, you need a credit score of 670 or higher to qualify for an unsecured credit card with a competitive interest rate. That said, plenty of card issuers offer credit cards specifically designed for those with fair, poor, and even nonexistent credit. However, these products usually involve higher interest rates, and credit cards are already known for often having high interest rates. It’s important to think carefully about whether you can truly afford to use a card with a higher interest rate.
Another option you may find is a secured credit card. These allow you to put down a cash deposit as collateral (therefore making the deal less risky for the issuer). Typically, that cash deposit acts as your credit limit, capping how much you spend. Activity on these cards is reported to the credit bureaus and can help you build your credit history. You may be able to graduate from a secured card to an unsecured card after showing that you’ve managed your debt responsibly.
You will likely need to build your score into the very good or higher range in order to qualify for credit cards that offer lower interest rates and more rewards, such as points or cash back.
Tip: Focus on paying off your credit card every month in full on the due date to avoid ever paying any interest on your purchases.
Can I Get an Auto Loan With a 627 Credit Score?
There’s not a specific minimum credit score required to take out an auto loan. Some lenders will want to see a 670 credit score or higher. Others will approve loans to those with a 600 or higher score. Some people may qualify with an even lower score.
What usually occurs is that the lower your credit score, the more interest you will pay for the privilege of borrowing cash for a car purchase. For instance, at the end of 2024, those with a credit score between 781 and 850 would on average be assessed an interest rate of 5.25% for a new car loan and 7.13% for a used car loan, according to Experian® research. For those with a score of 627, the rates would be higher: 9.83% for a new car loan and 13.92% for a used car loan. These higher interest rates can cost you thousands of additional dollars over the life of a loan.
If you have a lower credit score, it may make more financial sense to purchase a cheaper car in cash rather than to apply for a car loan. It can be worthwhile to consider this and other approaches when you need to buy a car.
Can I Get a Mortgage With a 627 Credit Score?
Excellent news: If you’re in the market for a new home, your 627 credit score can make the cut. Most conventional home lenders require a minimum credit score of 620, which means your score is just on the right side of the equation.
Again, however, a higher credit score can help you get a lower interest rate. Additionally, keep in mind that your mortgage lender will be looking at other factors as well, including your income, job stability, how much debt you carry, the amount you have saved, and more. In other words, your credit score isn’t the end of the story.
Also, there are certain types of loans that can be available to those with lower credit scores at the discretion of the lender. These can include FHA, VA, and USDA loans. Depending on a variety of factors, you may qualify for these programs.
Can I Get a Personal Loan With a 627 Credit Score?
Personal loans are usually unsecured loans, meaning they aren’t secured by any kind of collateral. They typically have a fixed interest rate that’s considerably lower than that of credit cards, and they have one- to seven-year terms in most cases. The lump sum amount you receive with a personal loan can range from $1,000 to $100,000.
Borrowers can use the funds for just about any purpose they want. For instance, you might use the funds for a kitchen remodel or to pay for a wedding. These loans do, however, tend to come with stricter eligibility requirements than other types of loans.
With a credit score of 627, you may or may not qualify for a personal loan. For instance, you might only be approved by a lender who charges you a higher interest rate than they would charge those with higher scores. Still, using a personal loan to consolidate debt could help build your credit score over time and may still be worth it in the long run, even if the interest rate is somewhat higher than you would like.
If you are contemplating a personal loan for any purpose, a personal loan calculator can help you understand the total cost of your loan over its lifetime. This can be a valuable step before you decide whether or not to forge ahead.
Recommended: How to Apply for a Personal Loan
The Takeaway
A credit score of 627 is in the fair category, which is below the good range. You may still qualify for some types of loans and lines of credit, though you likely won’t get the lowest interest rates and most favorable terms. Those tend to be reserved for those with very good or excellent scores. If you work on building your credit score into the good or higher range, you should have more competitive options to choose among for products like car loans, mortgages, credit cards, and personal loans.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOPL-Q424-034
Current HELOC Rates in Missouri Today
MISSOURI HELOC RATES TODAY
Current HELOC rates in
Missouri.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare HELOC rates in Missouri.
Key Points
• To understand how to get the best home equity line of credit rates in Missouri, it helps to know the factors that shape interest rates.
• Key factors influencing HELOC rates in Missouri include home equity, credit score, income, and combined debt-to-income ratio.
• HELOCs offer lower interest rates because your home serves as collateral. You pay interest only on the amount borrowed, not the full credit line.
• Comparing lenders and their qualification requirements is crucial to finding the best HELOC deals in Missouri.
• Money from HELOCs can be used for any purpose, including renovations, education expenses, and debt consolidation.
Introduction to HELOC Rates
If you’re pondering how to get equity out of your home and considering a home equity line of credit (HELOC), this guide will help you decide if a HELOC is right for you and smooth your application process if you do decide to apply. Best of all, it will help you get the most competitive HELOC interest rate available. You’ll learn the key things that influence HELOC rates in Missouri and how to ensure you’re ready to complete a HELOC application.
Let’s start at the beginning with what is a home equity line of credit.
What Is a HELOC?
A HELOC is a revolving credit line that’s based on the equity you have in your home. If you qualify, you may be able to borrow as much as 90% of your home’s value minus your mortgage. Missouri HELOC rates can vary, so it’s important to compare offers from different lenders to find the best option for your financial situation.
HELOCs offer lower interest rates than many other borrowing methods because your home serves as collateral. It’s also important to know that HELOC rates are variable, so the rate can change during the loan term. HELOCs have two distinct time periods, and it’s important to understand the difference.
The Draw Period
During the home equity line of credit’s draw period, which usually spans 10 years, you can access funds up to the limit of your credit, make payments, and borrow again. During this time, interest payments will be required, but principal payments are usually optional. For effective management of your finances during this phase, consider utilizing a HELOC interest-only calculator.
The Repayment Period
During the repayment period (typically 10 to 20 years), borrowing ends, and the principal is paid back with interest. This is when a HELOC repayment calculator will come in handy.
Where Do HELOC Interest Rates Come From?
HELOC rates are tied to the prime rate. The prime rate is a lender’s benchmark interest rate for creditworthy customers. Lenders set their prime rate in part in response to changes in Federal Reserve policy. Understanding this can help borrowers keep an eye on rate fluctuations and make informed decisions about when to apply for a HELOC.
How Interest Rates Impact HELOC Affordability
The interest rate you secure on a HELOC has a noticeable impact on both your monthly payment amount and the cost of interest over the life of the credit line. Take a look at this chart to see how different interest rates and terms affect payments.
| Loan Amount | Loan Term | Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 | $100,746 |
| 7.00% | $775 | $86,072 | ||
| 10 years | 8.00% | $1,213 | $45,593 | |
| 7.00% | $1,161 | $39,330 | ||
| $50,000 | 20 years | 8.00% | $418 | $50,373 |
| 7.00% | $388 | $43,036 | ||
| 10 years | 8.00% | $607 | $22,797 | |
| 7.00% | $581 | $19,665 | ||
| $25,000 | 20 years | 8.00% | $209 | $25,186 |
| 7.00% | $194 | $21,518 | ||
| 10 years | 8.00% | $303 | $11,398 | |
| 7.00% | $290 | $9,833 |
HELOC Interest Rate Trends
One way to better understand HELOC interest rates in Missouri is to have a sense of where the average prime rate has been in recent years. Since 2018, the prime rate has fluctuated. It hit a low of 3.25% in 2020 and a high of 8.50% in 2023. Looking at the graphic below, you can see how unusual it is to see a rate below 4.00%.
Historical Prime Interest Rate
| Date | U.S. Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Historical U.S. Prime Rates
Factors Influencing HELOC Rates
The prime rate is important, but it isn’t the only thing that will guide what HELOC rate you will be offered. There are several other important factors that play a significant role in determining HELOC rates, including your credit score and loan-to-value (LTV) ratio. We’ll examine them one by one.
Home Equity
Home equity is the amount of your home value that you actually own. It’s calculated by subtracting your home loan balance from the market value of your property. For example, if your home is worth $350,000, and your mortgage balance is $250,000, you have $100,000 in home equity. Homeowners generally need a minimum of 15% equity in their property to qualify for a HELOC.
Credit Score
Maintaining a high credit score, ideally 680 or higher, is of utmost importance when applying for a HELOC. Many lenders prefer a credit score of 700 or above.
Stable Income
How stable your job is may be just as important as your actual salary level. A steady income stream serves as a reliable indicator of a reduced likelihood of default, potentially resulting in more favorable HELOC rates. Consistent earnings serve as a testament to your financial dependability, a quality that lenders highly value when assessing your application.
Loan-to-Value Ratio
Most lenders require your combined loan-to-value ratio (mortgage balance plus loan amount / appraised home value) to be 90% or less, although some will allow you to borrow 100% of your home’s value. The ratio is a key metric in determining your credit limit. Here’s an example: Let’s say your home value is $500,000. Your mortgage balance is $300,000, and you’re applying for a $100,000 HELOC:
$300,000 + $100,000 = $400,000
$400,000 / $500,000 = 80%
Your combined LTV ratio would be 80%, well within the safety zone.
Variable vs Fixed Interest Rates
HELOCs have variable interest rates, as we’ve noted. While variable interest rates often start lower than fixed rates, they can adjust up or down in accordance with prevailing market conditions. Experimenting with different interest rate numbers using a HELOC interest-only calculator can provide you with valuable insights into the potential effects of these fluctuations.
Tools & Calculators
Online calculators are useful both before you apply for a HELOC or home equity loan or afterward, when rates change. Here are three of our favorites:
Run the numbers on your HELOC.
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Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
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HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
How to Qualify for a Competitive HELOC Rate
To obtain the best available Missouri HELOC rates, it is essential to prioritize enhancing your credit score, among other things. Consider these your to-dos before applying for any form of financing based on your home equity.
Cultivate Your Credit Score
Maintaining on-time payments and reducing your credit card balances are two ways to help ensure a healthy credit score. Regularly reviewing your credit report and addressing any errors is another good step to take. Mistakes do happen.
Assess Your Home Equity
You’ll need a minimum of 15%–20% equity in your home before applying for a HELOC. Your equity is your home’s value minus whatever you owe on your mortgage. Divide that result by the home value to get a percentage of equity. (Check a real estate web site for a rough idea of your home’s value.)
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is how much you owe in monthly debt payments divided by your gross monthly income. Home equity lenders generally look for a DTI that’s below 36%, though some will allow a ratio below 50%. A lower DTI can help you qualify for more favorable terms on your HELOC.
Application Process for a HELOC in Missouri
The application process for a HELOC in Missouri involves several steps. Taking them one at a time, completing the entire application, and double-checking everything for accuracy before submitting is the recipe for a smooth application process.
Step 1. Run the Numbers
Check that your credit score is 680 or above and that your DTI ratio is under 36%. Estimate your home equity to understand how much you can borrow. Some lenders offer online prequalification tools to streamline this process.
Step 2. Compare Lenders
Look at published offers from different lenders. Consider interest rates, but also examine qualification requirements, limits, fees, and the length of draw and repayment periods.
Step 3: Gather Your Documents
When preparing your HELOC application, it helps to gather and organize all the necessary documents in advance. This typically includes proof of income (such as W-2 forms and at least one tax return), and property documents such as proof of insurance. If you’re self-employed, lenders may ask for a profit-and-loss statement and two years’ tax returns.
Step 4: Submit Your Application
Check over everything for accuracy and don’t leave questions unanswered. This will help ensure a smooth path through the lender’s evaluation process.
Step 5: Get an Appraisal
A home appraisal plays a pivotal role in determining eligibility for a HELOC. If the appraised value of your home exceeds the outstanding balance of your mortgage, you may qualify for a HELOC. The lender will guide you through the appraisal process.
Step 6: Prepare for Closing
Before you can access your HELOC funds, you’ll need to sign an agreement and remit any fees that may be required. Some lenders make funds available within three days of the signing of your paperwork.
Tax Benefits and Considerations
Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. Interest deductions are limited to interest on the first $375,000 of the principal for individual taxpayers ($750,000 for married couples filing jointly). Consulting a tax advisor can help you confirm eligibility and itemize the deduction.
Closing Costs and Fees
HELOC closing costs are generally lower than typical home-buying or refinancing costs. An appraisal fee ($300-$600) is often the highest expense. Other costs may include application, origination, and administrative fees. Some lenders charge annual maintenance fees, transaction fees, inactivity fees, or early termination fees.
Alternatives to HELOCs
A HELOC is not the only option you have if you need to borrow money. There are different types of home equity loans — or rather, different ways to borrow against your home equity — as well as ways to borrow that don’t involve using your home as collateral. Below we’ll explore home equity loans, cash-out refinances, personal loans, and credit cards. Weigh the options to find the best fit for your needs.
Home Equity Loan
If you’ve been wondering what is a home equity loan, and how it is different from a HELOC, here are the basics: A home equity loan, like a HELOC, is secured by your home. Unlike a HELOC, it typically has a fixed rate for the entire term. And the money you borrow with a home equity loan comes as a lump sum versus through a line of credit.
Borrowers can usually access up to 85% of the equity built in their home through a home equity loan (versus 90% with a HELOC). A home equity loan is a smart option for those who need a specific amount of money for a large, one-time expense. Here’s a quick summary of HELOCs vs. home equity loans:
| HELOC | Home Equity Loan | |
|---|---|---|
| Type | Revolving line of credit | Installment loan |
| Interest Rate | Usually variable-rate | Usually fixed-rate |
| Repayment | Repay only what you borrow; you may have the option to make interest-only payments during the draw period. | Starts immediately at a set monthly payment |
| Disbursement | Charge only the amount you need. | Lump sum |
Cash-Out Refinance
Homeowners can get cash by doing a mortgage refinance for more than they owe. As you consider a cash-out refinance vs. a home equity line of credit, one thing to think about is whether the interest rate on a new loan would be higher than your current rate. If so, you’ll want to look carefully at the total cost of this method as compared to the cost of a HELOC or home equity loan. Some borrowers like the fact that a refinance leaves them with one monthly payment as opposed to two.
Personal Loan
A personal loan is a flexible loan that you pay back in regular payments over a term of 2 to 7 years. Like a HELOC, a personal loan can be used for various purposes, including home improvements, debt consolidation, and other expenses. Because personal loans are usually unsecured, interest rates may be higher than the rate you would obtain with a HELOC.
Credit Cards
Credit cards also typically come with higher interest rates than HELOCs, which can make them much more expensive if you carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, a HELOC or home equity loan may be better suited for larger expenses such as home improvements or debt consolidation.
The Takeaway
Understanding the intricacies of the best HELOC rates in Missouri is the best way to make smart choices about borrowing. By carefully comparing HELOC rates in Missouri, prospective borrowers can effectively secure competitive terms, potentially saving money over the long haul. It is imperative to evaluate factors such as creditworthiness, property values, and prevailing market trends to identify and obtain the most advantageous HELOC rate.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
FAQ
What is the monthly payment on a $50,000 HELOC?
With an 8.00% interest rate and a 10-year term, your monthly payment will come to $607. But exactly how much you’ll pay will depend on your interest rate and loan term. The same 8.00% interest rate over a 20-year term would cost $418 per month, although you would pay more interest overall if you had the 20-year term.
Is a HELOC a smart move for you?
If you need to borrow a large sum but not all at once, or if you aren’t sure how much you need to borrow, a home equity line of credit could provide you with a flexible option. You’ll only pay interest on the amount you actually borrow, but the credit line will be open should you need to borrow more. If you can secure a competitive interest rate thanks to good credit and a healthy level of home equity and are comfortable securing a loan with your home, a HELOC could be a good fit.
What is the monthly payment on a $100,000 HELOC?
The monthly payment for a $100,000 HELOC can fluctuate based on the interest rate and repayment terms. Assuming a 20-year term, here’s the payment amount at several interest rates: $716 (6.00%); $746 (6.50%); $775 (7.00%); $806 (7.50%); $836 (8.00%).
What are the benefits of a HELOC?
The main benefit of a HELOC is that it is so flexible: You borrow what you need from the credit line when you need it, and you only pay interest on the amount you borrow. Borrowers also like HELOC’s competitive interest rates and potential tax advantages.
What disqualifies you from getting a home equity loan?
Several factors can disqualify you from getting a home equity loan, including a lackluster credit history, high debt-to-income ratio, and insufficient home equity.
How difficult is it to get a HELOC?
The difficulty of getting a HELOC depends on your financial situation and the lender’s requirements. Factors such as credit score, home equity, and income will play a role. Preparing the necessary documentation and understanding the application process can make it easier to secure a home equity line of credit. Comparing lenders and their qualification criteria can also help.
Does HELOC affect credit score?
Initially, a HELOC may cause a dip in your score, because getting approved for one necessitates a hard credit inquiry. But after that, as long as you make your payments promptly, a HELOC could have a positive impact on your score.
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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More HELOC resources.
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What is a Home Equity Line of Credit
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Different Types of Home Equity Loans
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HELOC vs Home Equity Loan: How They Compare
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