Current Home Equity Loan Rates in New Hampshire Today
NEW HAMPSHIRE HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
New Hampshire.
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 home equity loan rates in New Hampshire.
Key Points
• Home equity loans provide homeowners the opportunity to borrow against the equity accumulated in their homes.
• Home equity loan rates are influenced by the prime rate and financial market dynamics.
• Borrower-specific factors that can significantly impact home equity loan rates include credit score, loan-to-value ratio, and debt-to-income ratio.
• Home equity loans can be used for a variety of purposes, including home improvements, educational expenses, medical bills, and debt consolidation.
• Home equity loan interest payments may be tax-deductible if the loan proceeds are used for substantial home improvements, up to IRS limits.
Introduction to Home Equity Loan Rates
In this guide, you’ll find the most current information on home equity loan rates in New Hampshire, including historical rate trends and the factors that influence the rates you may be offered. We’ll help you find the best rate in the Granite State. First, let’s make sure we cover what is a home equity loan.
How Do Home Equity Loans Work?
When you secure a home equity loan, your home becomes the collateral. This often means you can borrow money at a lower interest rate than if you were to get a personal loan. But it also means you have a second mortgage (assuming you’re still paying your first mortgage). Home equity loan interest rates are usually fixed, so if you like a predictable monthly payment, this could be a good fit for you. To qualify for a home equity loan, you typically need at least 20% equity in your primary residence.
In New Hampshire, and elsewhere, you can use a home equity loan for all sorts of things, from sprucing up your space to tackling education expenses, medical bills, or consolidating debt. If you’re wondering what is a home equity line of credit (HELOC), and how it’s different from a home equity loan, stay tuned — we’ll get to that momentarily.
The Source of Home Equity Loan Interest Rates
Home equity loan interest rates drive the overall cost of your loan. These rates aren’t just pulled out of thin air. The Federal Reserve sets its rates which in turn influence the prime rate — the interest rate banks offer to their most creditworthy clients.
How Interest Rates Impact Home Equity Loan Affordability
It’s important to think about how interest rates can affect the cost of your loan over time. For example, a 1% difference in interest rates on a 20-year loan can make a difference in your monthly payment. But it also makes a difference in how much interest you’ll pay over the life of the loan. Look at how that plays out if you borrow $30,000 and repay the funds plus interest over 20 years:
• At 6.00%: The monthly payment would be $215 and the total interest paid would be $21,583.
• At 7.00%: The monthly payment would be $233 and the total interest paid would be $25,822.
• At 8.00%: The monthly payment would be $251 and the total interest paid would be $30,224.
Home Equity Loan Rate Trends
Keep an eye on the prime interest rate as you’re determining how to get equity out of your home. It’s a solid barometer for where New Hampshire home equity loan rates might be headed.
In the chart below, you’ll find some recent history, showing how rates shifted from 2018 to 2023. And then the graphic shows a much longer trajectory, over 50-plus years.
Historical Prime Interest Rates
| Date | Prime 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 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
The prime rate isn’t the only factor driving the interest rate you’ll be offered if you apply for a home equity loan. There’s a long list of other factors that lenders will carefully assess to determine the level of risk associated with your application and offer you a rate that reflects that risk.
Credit Score
You probably recall that your credit score was vitally important when you took out your home loan to purchase your home. If you’re someone who’s been diligent about making timely payments, you’re in luck. Lenders are more inclined to offer you better interest rates. For a home equity loan, they usually look for a credit score of 680 or higher, but many prefer to see 700 or above.
Home Value
You can expect to need a home appraisal if you apply for a home equity loan, as the market value of your property will determine how much equity you have in your home (remember, most lenders will require you have 20% equity in order to get the loan).
Loan-to-Value (LTV) Ratio
Your home value is also important for computing your loan-to-value (LTV) ratio, which helps determine how much you’ll be allowed to borrow. You can compute your personal number by adding the amount you wish to borrow to the amount you currently owe on your mortgage. Then divide that total by the appraised value of your home. Multiply the result by 100 and you’ll have what’s called a “combined LTV,” or CLTV. The maximum LTV most lenders will allow for a home equity loan is typically 85%. If you’re unsure about how much you might be allowed to borrow, you can use a home equity loan calculator to get that number.
Home Value Stability
The stability of home values is another thing that lenders consider when setting rates. When the market is on the upswing, lenders are more likely to greenlight larger loans. But when the housing market takes a turn, lenders may tighten their belts, resulting in stricter criteria and smaller loan amounts.
Property Location
If your property is located in an area that is deemed at high risk for natural disasters, higher interest rates may result, as lenders consider these areas riskier bets.
Lender Policies
Policies set by individual lenders can have a significant impact on the interest rates borrowers are offered, and each lender is unique. That’s why you’ll want to compare interest rates, fees, and closing costs from a few different lenders during the loan application process.
How to Qualify for the Lowest Rates
Take these steps and you’ll better your chances of finding your lowest available home equity loan rate in New Hampshire.
Build a Strong Credit Score
Elevating your credit score can be the key to unlocking more favorable interest rates. Keep tabs on your score. Check your credit report for inaccuracies and if you find any, request a correction. Pay your bills on time, of course. And don’t max out every credit line you have.
Manage Debt-to-Income Ratio
The debt-to-income (DTI) ratio, which compares your monthly debt obligations to your gross monthly income, is a key factor in determining your eligibility for a loan. The typical DTI limit for a New Hampshire home equity loan is 36% to 50%, so it’s important to manage your DTI to ensure you meet the lender’s requirements.
Obtain Adequate Property Insurance
It’s a standard requirement for any home loan to have proper property insurance, and home equity loans are no exception. These policies — including special flood insurance policies — are designed to protect both you and the lender from the unexpected.
Maintain Sufficient Home Equity
In New Hampshire, and across the country, you need to keep at least 20% equity in your home to qualify for a home equity loan. This will help ensure you’re not borrowing more than you can afford.
Fixed vs. Variable Interest Rates
Home equity loans typically come with fixed interest rates, which means you’ll pay the same amount every month over the life of the loan. While fixed rates offer stability, they may start out higher than variable rates.
Tools & Calculators
As you search for the best home equity loan for you, online calculators can help you estimate your future payments. Here are a few you may find useful:
Run the numbers on your home equity loan.
-
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.
Closing Costs and Fees
Home equity loans typically come with closing costs that hover between 2% to 5% of your loan amount. These may include appraisal, credit report, document preparation, origination, notary, title search, and title insurance fees. It’s wise to factor in these fees as you shop around and compare lenders for a New Hampshire home equity loan.
Tax Deductibility of Home Equity Loan Interest
Couples filing joint tax returns can deduct interest paid on up to $750,000 of qualified home equity loans obtained after December 15, 2017, while single filers may deduct interest paid on loans up to $375,000 — that is, provided you use the money to “buy, build, or substantially improve” a home. For the nitty-gritty on how to maximize your tax benefits, a sit-down with a tax advisor is a smart move.
Alternatives to Home Equity Loans
There are different types of home equity loans you might consider if you’re in the market for a home equity loan. You’ll still want to consider current home equity rates in New Hampshire to make an informed choice where most of these options are concerned.
Home Equity Line of Credit (HELOC)
A HELOC is a bit like a credit card, but one that’s backed by your home. It allows you to borrow up to a certain approved amount and only pay interest on the amount of the credit line you actually use. When you compare a HELOC vs. a home equity loan, this is not the only difference you should note. Unlike a home equity loan, a HELOC typically has a variable rate that can change over time, which means your monthly costs might increase, too.
Home Equity Conversion Mortgage (HECM)
An HECM, or Home Equity Conversion Mortgage, is a government-insured reverse mortgage that empowers homeowners aged 62 and older to receive payments from the lender based on their home’s value. Borrowers can opt for a lump sum, regular payments, or a line of credit. And no payments are required until you leave the home. This is in stark contrast to home equity loans and HELOCs, which demand regular payments. While HECMs may have higher closing costs and longer processing times, they offer unique benefits that may be worth exploring. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A cash-out refinance is a special type of mortgage refinance that allows you to pay off your old mortgage and borrow extra funds to use as you wish. As with a home equity loan, lenders usually allow you to borrow up to 85% of your home’s value. When comparing a cash-out refinance vs home equity line of credit, the main difference, of course, is that the former is a refinance — meaning you’ll be getting a completely new mortgage at current rates in New Hampshire.
The Takeaway
Understanding home equity loan rates and the various factors that influence them can empower homeowners to make smart financial decisions. Utilizing online calculators, presenting your best possible financial profile to prospective lenders, and exploring alternative options such as a HELOC or cash-out refi can help ensure a more secure financial future in New Hampshire.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What would my monthly payment be on a $50,000 loan?
A home equity loan of $50,000 would require a monthly payment of $587. That’s assuming an interest rate of 7.25% and a 10-year term. Changing either the rate or term would change the payment amount.
What is the monthly payment on a $100,000 HELOC?
For the most accurate estimate of the monthly payment on a $100,000 HELOC, use a HELOC monthly payment calculator. Payments can fluctuate based on the current interest rate and the amount of your credit line you’ve used.
What is the payment on a $25,000 home equity loan?
A home equity loan of $25,000 would mean a monthly payment of $297, assuming you’re able to secure a 7.50% interest rate and repay the loan over 10 years.
What would the payment be on a $30,000 home equity loan?
When you’re considering a $30,000 home equity loan, the loan term will have a big impact on your monthly payment. Borrow $30,000 at 8.00% and repay it over 10 years and you’ll pay $364 a month. With a 20-year term your payment will be $251. Remember, though, that the longer payment term results in significantly more interest paid over the life of the loan.
What could disqualify you from getting a home equity loan?
There are a number of reasons you might not qualify for a home equity loan, including a poor credit history, not enough equity in your home, a high debt-to-income ratio, and insufficient property insurance. These factors can dramatically affect your ability to get a home equity loan, so it’s important to consider them before applying.
What are the benefits of a HELOC?
HELOCs offer a variety of benefits, including flexible borrowing options, lower interest rates than credit cards, and the ability to pay interest only on the amount of money you are using. They’re a good solution if you know you need money for a project, such as a home renovation, but you don’t know exactly how much it will cost. Plus, the interest you pay on a HELOC may be tax deductible if you borrow money to substantially improve your home.
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.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q424-089
More home equity 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 Home Equity Loan Rates in Alaska Today
ALASKA HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
Alaska.
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 home equity loan rates in Alaska.
Key Points
• Home equity loans allow homeowners to borrow against the equity in their homes, using their property as collateral.
• Home equity loan interest rates are influenced by several economic factors, especially the prime rate.
• Home equity loans offer fixed interest rates and predictable monthly payments, making them a good option for budgeting and financial planning.
• Closing costs and fees for home equity loans can vary, so it’s important to factor these into the overall cost of the loan.
• Home equity loan interest may be tax-deductible if the loan proceeds are used for home renovation.
Introduction to Home Equity Loan Rates
This guide will help you understand Alaska home equity loans rates, which vary based on market conditions and the borrower’s financial profile. We’ll explain how you can save thousands in interest by getting the best rate available and avoiding unnecessary fees. Whether you settle on a home equity loan or another means to get equity out of your home, you can feel confident that you’ve made the best financial choice for your future.
How Do Home Equity Loans Work?
A home equity loan is a second mortgage (assuming you’re still paying off your first home loan) that leverages your home as collateral. You’ll receive the funds in a lump sum, to be repaid in equal monthly installments over a term that can extend from five to 30 years. These loans often come with lower interest rates than unsecured personal loans, and typically offer a fixed rate. To qualify, homeowners should have at least 20% equity in their primary residence.
The Origin of Home Equity Loan Interest Rates
Home equity loan interest rates are influenced by a variety of economic factors, most notably the prime rate, which is the interest rate that banks charge their most creditworthy customers. Federal Reserve policy decisions also impact home equity loan rates. Understanding these factors can help borrowers anticipate rate fluctuations and make informed decisions about the best time to take out a home equity loan or HELOC.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure has a big impact on the affordability of a home equity loan. Over a 20-year term, a 1% difference in interest rate could mean a higher monthly payment and an additional $11,000 in interest paid over the life of the loan. This is especially important in a high cost of living state like Alaska.
Recommended: HELOC Interest Only Calculator
Home Equity Loan Rate Trends
As we mentioned above, home equity loan rates are influenced by the prime interest rate, which fluctuates according to market conditions. By keeping an eye on the prime rate’s ups and downs, you can time your home equity loan application to get a better deal in Alaska.
Historical Prime Interest Rates
Since 2018, the U.S. prime rate has fluctuated significantly, with a low of 3.25% in 2020 and a high of 8.50% in 2023, as you can see in the table and graphic below. These changes have a direct impact on Alaska home equity loan rates, which often follow the prime rate. This means that the cost of borrowing with an Alaska home equity loan can change over time, so it’s important to keep an eye on the prime rate and how it may affect your loan.
| Date | Prime 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 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
Your credit score, loan-to-value ratio, home value and its stability, along with the property’s location and the lender’s policies, all play a part in the interest rate you’ll be offered for a home equity loan in Alaska. Lenders take these factors into careful consideration when assessing your risk as a borrower.
Credit Score
Lenders favor those with a credit score of 680 or higher, and the higher your score, the more competitive your interest rate is likely to be.
Loan-to-Value (LTV) Ratio
The LTV ratio is a big deal when it comes to home equity loans. It’s the number you get when you divide your total home loan debt (mortgage plus home equity loan) by the appraised value of your home. Most lenders cap home equity loans at an LTV of 85%. The LTV ratio helps lenders decide what interest rate and loan term to offer you. It also comes into play with a HELOC and mortgage refinance, as it helps lenders figure out how large a loan to approve.
Home Value
Lenders in Alaska will evaluate your home’s worth through an independent appraisal. This step is crucial, as it will determine the maximum loan amount you can borrow against the appraised value and the equity you have in your home.
Home Value Stability
The ebb and flow of home values have a direct impact on the equity you can tap into. Lenders are more generous with loan amounts when the value of your home is on the rise, as it means less risk for them. However, a dip in home values might lead to more conservative lending practices.
Property Location
If you live in an area that’s considered high-risk, you could be charged a higher interest rate. High-risk areas are those that are more likely to experience extreme weather events or natural disasters, such as hurricanes, floods, and wildfires. If you’re trying to get a home equity loan, a lender might require you to meet additional criteria to ensure that you can still make your payments, even if your home is damaged or destroyed.
Lender Policies
Lender policies have a big impact on the interest rates offered on home equity loans. That’s why it’s important to shop around with multiple lenders and compare interest rates, along with fees and closing costs, to make sure you’re getting the best deal on your home equity loan.
Recommended: HELOC Monthly Payment Calculator
How to Qualify for the Lowest Rates
To get the best home equity loan rates, focus on elevating your credit score, managing your debt-to-income ratio, reevaluating your property insurance, and building equity in your home. If you follow these steps, you’ll be in a better position to get the best home equity loan rates available.
Build a Strong Credit Score
A robust credit score can be a game-changer, often translating to more favorable interest rates on home equity loans in Alaska. Keep your credit history gleaming and your bill payments prompt. By doing so, you’re opening doors to better terms and conditions when you apply for loans and credit.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a crucial factor in securing a home equity loan. This ratio compares your monthly income to your monthly debt payments, giving lenders a snapshot of your financial health. Most lenders prefer to see a DTI of 36% or less, but some will lend to borrowers with a DTI between 36% and 50%.
Obtain Adequate Property Insurance
Getting the right property insurance is a must when applying for home equity loans, especially in areas prone to flooding. By making sure your property is adequately insured, you remove one potential hurdle to home equity loan approval.
Maintain Sufficient Home Equity
In Alaska, the rule of thumb is to keep at least 20% equity in your home if you’re thinking of a home equity loan. This equity acts as a safety net, assuring the lender that your property holds enough value to cover the loan should the unexpected happen.
Fixed vs. Variable Interest Rates
Home equity loans typically come with fixed interest rates, which means you’ll know exactly what your monthly payment will be for the life of the loan. While fixed rates provide peace of mind, they can start out higher than variable rates.
This is an important consideration when deciding between a heloc vs home equity loan. HELOCs typically have variable rates, which may start out lower but can increase significantly depending on market conditions.
Tools & Calculators
SoFi has a variety of home equity loan calculators and other helpful tools to help you figure out what you can afford and compare your options. These tools can help you decide whether an Alaska home equity loan is right for you and how much you can afford.
Run the numbers on your home equity loan.
-
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.
Closing Costs and Fees
Closing costs for home equity loans in Alaska typically range from 2% to 5% of the loan amount. These may include fees for the appraisal, credit report, document preparation, and title insurance, among others. Loan origination fees can vary from 0.5% to 1% of the loan amount, and title insurance costs could be an additional 0.5% to 1% of the loan balance. Keep in mind that opting for a no-closing-cost loan may mean a higher interest rate.
Tax Deductibility of Home Equity Loan Interest
The interest on a home equity loan is tax-deductible if the loan is used to make substantial home improvements. If you are married and file jointly, you can deduct the interest on loans up to $750,000. If you are single, you can deduct the interest on loans up to $375,000. You must itemize your deductions to claim the deduction. Talk to a tax advisor to make sure you take full advantage of the deduction.
Alternatives to Home Equity Loans
There are different types of home equity loans and lines of credit to meet different borrower needs. Alternative financing options include home equity lines of credit (HELOCs), home equity conversion mortgages (HECMs), and cash-out refinances. Each of these options has its own unique features and eligibility requirements.
Home Equity Line of Credit (HELOC)
Even if you’re intent on a home equity loan, it’s important to know what is a home equity line of credit. A HELOC is like a credit card in that it allows you to borrow up to a certain limit and only pay interest on the amount you actually borrow. However, the interest rate on a HELOC is variable, meaning it can fluctuate with the market. This can lead to increased costs if rates rise.
Home Equity Conversion Mortgage (HECM)
An HECM is a government-backed reverse mortgage that allows homeowners age 62 and older to receive payments from the lender based on their home’s value. The proceeds from an HECM may be received as a lump sum, regular payments, or a line of credit. HECMs do not require homeowners to make payments until they leave the home, whereas home equity loans and HELOCs require regular payments. (While SoFi doesn’t offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A cash-out refinance is a bit like hitting the reset button on your mortgage. You take out a new home loan that’s larger than your existing one, and pocket the difference in cash. Most lenders in Alaska will let you borrow up to 85% of your home’s value. But remember, this is a new mortgage, so you’ll need to have some equity built up to make it work. If you’re considering a cash refinance vs a home equity line of credit, you should know that the first requires only one monthly payment while the second requires two payments: your original mortgage plus the HELOC.
Recommended: HELOC Interest Only Calculator
The Takeaway
Understanding Alaska home equity loan rates and the factors that influence them is key to making the best financial decision for you. By researching, comparing multiple lenders, keeping an eye on your credit score, and considering alternative financing options, you can secure the best loan terms to meet your needs and financial goals.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What would my monthly payment be on a $50,000 loan?
When you’re considering a $50,000 home equity loan, you’ll want to take a close look at the current interest rates and loan terms to figure out what your monthly payments might be. For example, at 8.00% interest over 10 years, your payment would be around $607. To get an estimate of your monthly payment, use a home equity loan calculator.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 Home Equity Line of Credit (HELOC) is not a fixed amount. It varies based on the interest rate and the amount of the credit line that has been drawn. HELOCs typically have variable interest rates, so your payments can go up or down over time. But assuming you use the full amount, at 8.00% over 20 years, your payment would be about $836.
What is the payment on a $25,000 home equity loan?
The monthly payment on a $25,000 home equity loan can vary depending on the interest rate and the loan term. At 7.50% interest over 10 years, your monthly payment would be approximately $297. To get an accurate estimate of your potential monthly payment, it’s a good idea to use a loan calculator.
What would the payment be on a $30,000 home equity loan?
When you’re thinking about a $30,000 home equity loan, the interest rate and the length of the loan term will affect your monthly payment. For example, at 7.50% interest over 10 years, your payment would be about $356. Use a loan calculator to get a rough idea of your payment based on current rates. This will help you make a more informed decision about how much you can afford to borrow.
What could disqualify you from getting a home equity loan?
There are a number of factors that can disqualify you from getting a home equity loan. Some of the most common include a credit score that’s too low, not enough equity in your home, a high debt-to-income ratio, and inadequate insurance coverage on the property you want to use as collateral. These factors can make it harder to get a home equity loan because they suggest a higher risk of default to the lender.
What are the benefits of a HELOC?
HELOCs have many benefits, including flexible borrowing options, lower interest rates than credit cards, and the ability to borrow only what you need and pay interest on only what you borrow. These benefits make HELOCs an attractive option for people who want to have financial flexibility.
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.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q424-062
More home equity 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.
Current Home Equity Loan Rates in Connecticut Today
CONNECTICUT HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
Connecticut.
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 home equity loan rates in Connecticut.
Key Points
• Borrowers with higher credit scores and lower debt-to-income ratios can secure better rates on home equity loans.Borrowers with higher credit scores and lower debt-to-income ratios can secure better rates on home equity loans.
• Fixed-rate home equity loans provide predictable monthly payments, while variable-rate loans offer lower initial rates that can fluctuate over time.
• Closing costs for home equity loans typically range from 2% to 5% of the loan amount.
• Interest on home equity loans is tax-deductible if the loan proceeds are used for home purchase, construction, or improvements.
• Alternatives to home equity loans include home equity lines of credit and home equity conversion mortgages, each with its own features and eligibility requirements.
Introduction to Home Equity Loan Rates
Welcome to our guide on home equity loan rates in Connecticut. We’ve done the research and collected the information you need to make an informed decision about home equity loans. By the end of this guide, you’ll understand the different factors that affect home loan rates, how to compare offers from different lenders, and how to find the best rates in Connecticut. We’ll also cover home equity line of credit (HELOC) rates in Connecticut, so you can understand all of your options.
How Do Home Equity Loans Work?
First, let’s clarify what is a home equity loan. It’s an installment loan that uses your home as collateral, which allows for lower interest rates than many other types of loans. The interest rate is typically fixed, so your monthly payments will remain consistent.
To qualify for a home equity loan, you’ll need to have at least 20% equity in your primary residence. To determine your maximum loan amount, your lender will calculate your combined loan-to-value ratio (CLTV), or your mortgage balance plus the amount you want to borrow, divided by the appraised value of your home. Most lenders require your CLTV to be 85% or less for a home equity loan or home equity line of credit (HELOC).
Home equity loans in Connecticut can be used for a variety of purposes, including home renovations, education, medical bills, and debt consolidation. What’s not to love? Here’s the downside: If you encounter financial hardship and can’t repay your loan, your house is on the line.
Where Do Home Equity Loan Interst Rates Originate?
Home equity loan rates in Connecticut are influenced by a variety of economic factors, including the prime rate. The prime rate is the interest rate that banks charge their most creditworthy customers. Federal Reserve policy decisions regarding interest rates can also influence home equity loan rates in Connecticut. Understanding the factors that influence home equity rates can enable borrowers to anticipate rate fluctuations and make informed decisions about when and how to get equity out of your home in Connecticut.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure can have a significant impact on your ability to manage loan repayments over the loan term. For instance, over a typical 20-year mortgage term, a 1% difference in the interest rate will translate into a higher monthly payment. More significantly, this seemingly small difference can result in your paying an additional $11,000 in interest over the duration of the loan. The table below shows how different loan amounts, repayment terms, and interest rates affect the monthly payment on a home equity loan.
| 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 |
Visit our Home Equity Loan Calculator
Home Equity Loan Rate Trends
Keep an eye on the prime interest rate, as it’s a good barometer for where home equity loan rates in Connecticut may be headed.
Historical Prime Interest Rates
Since 2018, the U.S. prime rate has moved dramatically. It hit a low of 3.25% in 2020 and a high of 8.50% in 2023. This wide range reflects the many economic changes that have occurred over the past five years, and how those changes have affected the decisions of businesses and consumers in Connecticut and nationwide.
| Date | Prime 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 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
National interest rate and market conditions aren’t the only factors that influence home equity loan rates in Connecticut. Some influences are much closer to home. These include your credit score, the loan-to-value (LTV) ratio, the current market value of your home, the stability of your home’s value over time, the location of your home, and the policies of your lender.
Credit Score
Here’s the deal: The better your credit score, the better your chances of snagging a home equity loan with a sweet interest rate. Lenders in Connecticut typically look for a credit score of 680 or higher, but a score of 700 or above could really make you stand out. Plus, a higher credit score might just open the door to more flexible loan terms. (For reference, a conventional mortgage refinance requires a credit score of 630 to 650, with the lowest interest rates going to borrowers with scores of 740 and above.)
Loan-to-Value (LTV) Ratio
The LTV ratio is a key factor in determining your loan terms. It’s calculated by dividing the loan amount by the appraised value of the property. Your combined loan-to-value (CLTV) includes your remaining mortgage principal too. Most lenders will approve a CLTV of up to 85%.
Home Value
Lenders often use independent home appraisals to make sure they’re lending an appropriate amount of money based on the home’s market value. These appraisals are also important for you, the homeowner, because they help you know how much equity you have in your home. The more equity you have, the more you can borrow.
Home Value Stability
The ups and downs of home values directly impact the equity you can tap into. When values rise, lenders are more open to approving larger loans, seeing the reduced risk in the increased property value. But when values dip, lenders might tighten the reins, which could mean stricter criteria and smaller loans.
Property Location
Living in areas with a history of extreme weather or natural disasters, like hurricanes, floods, and wildfires, can mean higher interest rates. Lenders may view these areas as riskier to lend in because they’re more likely to experience property damage and infrastructure disruption. To compensate for this risk, they may charge higher interest rates.
Lender Policies
When searching for a home equity loan in Connecticut, it’s important to consider the policies of the lenders you’re looking at. These policies can have a big impact on the interest rates you’re offered. By comparing interest rates, fees, and closing costs from multiple lenders, you can be sure you’re getting the best home equity loan in Connecticut for your financial goals and situation.
How to Qualify for the Lowest Rates
To qualify for the best home equity loan rates that Connecticut has to offer, you need to have a strong credit score, a good debt-to-income ratio, adequate property insurance, and a good amount of home equity. By working on these things, you will be able to get the best loan terms and enjoy the benefits of homeownership with more financial flexibility and peace of mind.
1. Build a Strong Credit Score
It’s a well-known fact that a higher credit score can open the door to better interest rates on home equity loans in Connecticut and elsewhere. With a strong credit score, you’re seen as a more reliable borrower, and that’s the kind of profile lenders love to see. It could mean thousands of dollars in savings on interest payments over the life of your loan.
2. Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio, which compares your monthly income to your monthly debt obligations, is a common yardstick used by lenders. Typically, they look for a DTI ratio between 36% and 50% for home equity loans in Connecticut. This range helps them assess your capability to handle your current debt and take on the added monthly payments of a home equity loan.
3. Obtain Adequate Property Insurance
Having the right property insurance is key to getting a home equity loan in Connecticut. This is especially true if you live in an area that’s at risk for flooding. By having insurance, you’re protecting your property and your finances. This is an important part of being a responsible homeowner and will give you peace of mind and financial security.
4. Maintain Sufficient Home Equity
If you’re in Connecticut and eyeing a home equity loan, it’s wise to keep at least 20% equity in your home. By meeting this equity threshold, you’re better protected against the ebb and flow of the real estate market. Plus, you’ll be less likely to find yourself in a tight spot where your mortgage balance is higher than what your home is worth.
Fixed vs. Variable Interest Rates
When it comes to home equity loans in Connecticut, you’ll find most have fixed interest rates. This means you can plan your budget with confidence, knowing your monthly payments won’t fluctuate. While fixed rates offer stability, they can sometimes start out higher than variable rates. Variable rates may be lower initially, but they have the potential to increase over time.
Tools & Calculators
SoFi’s suite of tools and calculators can help you get a better handle on your home equity loan payments. This can help you feel more confident in your financial decisions and help you make the most of your home equity. Here, in addition to the home equity loan calculator, you’ll find a HELOC repayment calculator and a HELOC interest only calculator.
Run the numbers on your home equity loan.
-
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.
Closing Costs and Fees
Home equity loan closing costs in Connecticut come to about 2% to 5% of the loan amount. Expect to see charges for an appraisal, credit report, document preparation, and title insurance. Loan origination fees can vary, sometimes as a flat rate. Title insurance typically costs 0.5% to 1% of the loan balance, and appraisals usually run between $300 and $500.
Tax Deductibility of Home Equity Loan Interest
In Connecticut, the interest on a home equity loan is tax-deductible if you use the money for home improvements. The deduction limit is $750,000 for joint filers and $375,000 for single filers. You’ll need to itemize your deductions to claim this benefit. We recommend consulting a tax advisor to make sure you get the maximum tax benefit.
Alternatives to Home Equity Loans
Beyond different types of home equity loans, Connecticut residents have other options to consider, such as home equity lines of credit (HELOCs), home equity conversion mortgages (HECMs), and cash-out refinances. Each of these options has its own unique features and eligibility requirements, so it’s important to carefully consider each one before making a decision.
Home Equity Line of Credit (HELOC)
A HELOC, or home equity line of credit, is a bit like a credit card, because you can borrow up to a certain limit and only pay interest on the amount you’ve actually spent. But there’s a catch: The interest rates on HELOCs are variable, which means they can go up and down with the market. Below you’ll see an at-a-glance comparison chart 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. |
Recommended: What Is a Home Equity Line of Credit?
Home Equity Conversion Mortgage (HECM)
An HECM is a government-insured reverse mortgage that empowers homeowners aged 62 and older to receive payments from the lender based on their home’s value. The beauty of an HECM is the flexibility it offers: You can opt for a lump sum, regular payments, or a line of credit. Unlike home equity loans and HELOCs, HECMs don’t require repayments. (While SoFi doesn’t offer HECMs, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A cash-out refinance is a new mortgage that pays off your old one and lets you pocket the difference. Lenders typically allow you to borrow up to 85% of your home’s equity. For details, check out our comparison of Cash-Out Refinances vs Home Equity Lines of Credit
Recommended: HELOC Interest Only Calculator
The Takeaway
Understanding home equity loan rates in Connecticut and the factors that influence them is key to making a smart financial decision. By shopping around, maintaining a good credit score, and considering other financing options, you can find the best loan for your needs and goals.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What would my monthly payment be on a $50,000 loan?
If you’re thinking about a $50,000 home equity loan Connecticut, you’ll want to consider how the interest rate and loan term will impact your monthly payments. A 10-year loan at 8.50% interest means a monthly payment of $620. At 7.50% interest you’re looking at a payment of $594.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 home equity line of credit Connecticut can vary based on the current interest rate and the amount of credit you have used. if you have borrowed the entire $100,000 credit line and you are in a 10-year repayment period, you can expect to pay $1,240 per month if your annual percentage rate (APR) is 8.50%. To get a better estimate of your monthly payment, use a HELOC calculator to input your loan amount, interest rate, and the length of the loan.
What is the payment on a $25,000 home equity loan?
When you’re pondering a $25,000 home equity loan in Connecticut, make sure to consider how the interest rate and loan term will play into your monthly payments. At 7.50% interest over 10 years, your monthly payment would be approximately $297. For a precise picture of what you might owe, a dependable loan calculator is your best friend.
What would the payment be on a $30,000 home equity loan?
If you’re thinking about a home equity loan of $30,000, it’s important to consider how the interest rate and the loan term will affect your monthly payments. For example, at 7.50% interest over 10 years, your payment would be about $356. To make sure you’re making a smart financial move, use a loan calculator to get a better idea of what your payments will look like and what kind of loan term will work best for your long-term financial goals.
What could disqualify you from getting a home equity loan?
A low credit score, not enough equity in your home, a high debt-to-income ratio, or insufficient insurance coverage could be the culprits. It’s important to be aware of these factors and address them before applying for a loan.
What are the benefits of a HELOC?
HELOCs have a number of advantages. They offer lower interest rates than credit cards and the ability to only pay interest on the amount you’ve borrowed. These benefits make HELOCs an attractive option for many people looking to fund home improvement projects, consolidate debt, or cover unexpected expenses.
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.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q424-067
More home equity 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 693 a Good Credit Score?
Is 693 a Good Credit Score?
With a 693 credit score, you fall right within the “good” range for two of the most common scoring models: FICO® and VantageScore®. While lenders usually view this score as acceptable, bumping it up into the “very good” range could open the door to even better rates and terms.
Read on to learn more about a 693 credit score and what you can get with it.
What Does a 693 Credit Score Mean?
As mentioned above, a 693 credit score is part of the “good” range, which spans from 670 to 739. A score like this tells lenders that you’re handling credit pretty well. As a result, you’ll likely have access to a good selection of credit cards and loans, though you might not get the lowest interest rates out there.
If you can bump your score up to 740, which falls within the “very good” range, you could potentially get better rates and save more on interest in the long run.
What Else Can You Get with a 693 Credit Score?
There’s no single magic number that guarantees approval for a new credit account or a specific interest rate. While your credit score is important, each lender has its own criteria for deciding who gets approved. Here’s what you can expect for some common credit products.
Can I Get a Credit Card with a 693 Credit Score?
Your credit score plays a big role in whether you get approved for a new credit card and what kind of credit limit and interest rate you’ll get. A good credit score like 693 usually helps you qualify for rewards cards that offer things like points, cash back, and decent interest rates. These cards may also include extra perks like rental car insurance, purchase protection, and bonus rewards for everyday spending.
If you can boost your score to 720 or higher, you may be able to access premium rewards cards. These cards often come with large signup bonuses, sometimes worth hundreds of dollars, and lower interest rates, which can help you save more over time.
If you’re looking to consolidate high-interest credit card debt, consider using a personal loan calculator. These online tools can provide an estimate of potential interest savings.
Can I Get an Auto Loan with a 693 Credit Score?
With a 693 credit score, you can usually qualify for a car loan since there’s no universal minimum requirement. Every auto lender also has its own guidelines, and some might consider things like your debt-to-income ratio.
In general, with a 693 credit score, you should be able to get a used car loan. New car loans typically go to people with scores closer to 730, though you may still be able to get one with a score around 600. Keep in mind that having a higher score usually means getting a better interest rate and lower monthly payments.
Can I Get a Mortgage with a 693 Credit Score?
As with other types of credit, there’s no single credit score that guarantees you will qualify for a mortgage. It depends on the lender and the type of mortgage you’re applying for.
For example, conventional loans usually require a credit score of at least 620, while FHA loans only need a score of 500 with a minimum 10% down payment. So with a 693 score, you’re likely in a good position to qualify. However, if you’re applying for a jumbo loan, you’ll typically need a credit score of 700 or higher. Lenders also look at other factors like your work history, down payment, debt-to-income ratio, and assets.
Remember, because you qualify for a mortgage right now doesn’t always mean it’s the best time to apply. Even a small increase in your credit score could save you tens of thousands of dollars over the life of your mortgage. So, before you submit a full mortgage application, make sure to get preapproved to see what terms you qualify for.
Can I Get a Personal Loan with a 693 Credit Score?
Typically, most lenders look for a score of 610 or higher to qualify for personal loans. With a 693 score, you’re in a good spot to potentially get more favorable rates and terms.
But as with auto or home loans, your credit score isn’t the only factor lenders look at. They also consider things like your debt-to-income ratio and income, among other factors.
To see what personal loans or credit card consolidation loans you may qualify for, you can prequalify with many lenders. Considered the first step in a loan application process, prequalification typically takes just a few minutes to complete. The lender will likely perform a soft credit check, but this won’t impact your credit score.
How to Improve a 693 Credit Score
A score of 693 opens up options for loans and credit cards. But raising it even higher can help you get approved for even more, often with better terms and lower rates.
Since 693 is on the lower end of the “good” range, it’s a smart idea to keep an eye on your credit score to avoid slipping into the “fair” range (580 to 669), as this can limit your options.
Here are some ways you can help improve your credit score:
Make On-Time Payments
Your payment history makes up 35% of your FICO credit score. So paying your bills on time is one of the best things you can do to keep your score up. Setting up autopay can help ensure you don’t miss a payment.
Limit the Amount of Credit You Use
Your credit utilization ratio — or how much credit you use compared to your available credit limit — is another big factor that determines your credit score.
In simple terms, it’s best not to get too close to your credit limit. A good rule of thumb is to use less than 30% of your total credit limit. For example, if your credit card limit is $10,000, try to keep your balance at or below $3,000.
Hold On to Your Older Credit Cards
Keeping your older credit card accounts open helps maintain a lengthy credit history, even if you rarely use them. To keep the account active, you can make a small purchase now and then, like buying a coffee or some gas. This is one way to show lenders that you manage credit well over time.
Limit How Often You Apply for Credit
Even if you get credit card offers all the time, it’s better to avoid applying for credit unless you truly need it. Credit score models consider how many applications you’ve submitted in a certain amount of time, so it’s smart to apply only when necessary.
Keep an Eye on Your Credit Report
Mistakes can happen, and unfortunately, they can negatively impact your credit score. That’s why it’s important to check in on your score regularly. You can get free copies of your reports at AnnualCreditReport.com.
If you spot any errors — like an account that’s not yours or a bill showing up as unpaid that you know you’ve paid — make sure to dispute them as soon as possible.
The Takeaway
A 693 credit score is generally considered good, and it can help you qualify for a variety of credit products, including mortgages, loans, and credit cards. However, because each lender has different requirements, your score might not always get you the best terms. And you could end up paying higher interest rates and fees. Fortunately, with some effort, you can work on boosting your credit score even higher.
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.
FAQ
Is 693 a bad credit score?
A 693 credit score falls within the “good” range on both the FICO and VantageScore credit scoring models. However, it’s lower than the average U.S. credit score of 717.
What can I get with a 693 credit score?
A 693 credit score is considered good. You can likely qualify for a range of credit cards and loans, though you’ll probably pay higher interest rates and fees than people with a higher credit score.
Can I buy a house with a 693 credit score?
Credit score requirements vary by loan type. But generally speaking, you’ll need a credit score of at least 620 to qualify for a conventional mortgage. Consider talking to a mortgage professional about which option makes the most sense for you.
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.
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.
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 .
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.
SOPL-Q324-056
Is 560 a Good Credit Score?
Is 560 a Good Credit Score?
A 560 credit score is considered poor not good. In fact, 560 falls into the lowest FICO® credit score range. This means that your rating does not reflect responsible use of credit in the past.
But the upside is that credit can be built, and 560 isn’t too far shy of the next level, which starts with the score of 580. With patience and persistence, you may be able to bring your credit score higher, thus opening up opportunities for more successful credit and loan applications — and lower interest rates on the loans you successfully qualify for.
Key Points
• A 560 credit score is considered poor and falls into the lowest FICO credit score range.
• A 560 score is close to the “fair” category, which starts at 580.
• Credit can be built from 560 with patience and persistence.
• Qualification for certain types of credit is possible, but likely at higher interest rates.
• Improving your credit score can open up opportunities for better loan terms and lower interest rates.
What Does a 560 Credit Score Mean?
While there are different types of credit scores out there, FICO scores are the most popular in the United States. FICO scores range from 300-850, and are organized into the following tiers:
• Poor: 300-579
• Fair: 580-669
• Good: 670-739
• Very good: 740-799
• Excellent (or exceptional): 800-850
As you can see, a score of 560 is officially in the “poor” category of FICO credit scores — but it’s also only 20 points shy of breaking into the “fair” category, which could open more doors in the world of borrowing.
Plus, a credit score of 560 is far from the lowest score in the “poor” category. Although you’ll likely have to shop around more for a lender who is willing to work with you, you may still qualify for certain types of credit with a score of 560 (though your interest rates are likely to be higher than they would be if your score were further up the ladder).
What Else Can You Get With a 560 Credit Score?
While a 560 credit score does have room for improvement, there may still be some opportunities available to you if you really need a loan. (That said, if you can afford to wait until you’ve repaired your credit score, doing so might be worthwhile. Lower interest rates could save you hundreds, or even thousands, of dollars over time.)
Here are details regarding what to expect with your current credit score.
Can I Get a Credit Card With a 560 Credit Score?
Yes, there are credit cards on the market geared toward people with poor credit or little credit history — which may be referred to as having a thin credit file. Many of these are secured credit cards, which give borrowers with poor credit the opportunity to open a credit card and ideally use it to build their credit score up. You put down a cash security deposit equal to the desired credit limit on the card. As you spend, you can potentially build your score.
You may also be able to successfully apply for an unsecured credit card, which doesn’t require a security deposit. Just know that you might be assessed a higher interest rate than those with a loftier score. While you may be eager to have an unsecured card, keep in mind that credit card debt can be some of the easiest debt to get into and the hardest to pay off. You’ll want to be sure to use your new card responsibly so you can build your score over time.
Can I Get an Auto Loan with a 560 Credit Score?
It might not be the most satisfying answer, but the truth is, it depends. Every lender has its own algorithm for determining creditworthiness, and some auto lenders do offer loans to borrowers with poor credit scores.
That said, you’re more likely to qualify if you can build your credit score up to the “fair” category. If you can wait until then to get behind the wheel of your new ride, all the better. That’s because the higher your score, the lower your interest rate is likely to be. What’s more, since vehicles are depreciating assets, a high interest-rate auto loan can quickly put you in more debt than your car is worth (also known as the loan becoming “upside down”).
Can I Get a Mortgage with a 560 Credit Score?
Everyone needs a place to live, and buying a house can be a way to build wealth over time. It can, however, be a challenge to get a loan to achieve homeownership with a low credit score.
While a credit score of 560 may limit your options, there are still mortgage lenders who work with people with lower credit scores. Some of it depends on the type of mortgage you go for. For example:
• FHA loans have a minimum credit score of just 500, provided you can afford a 10% down payment.
• VA loans may be available with a credit score of 580 and higher.
• Conventional mortgages can likely be found with a credit score of 620 and above.
There are, however, other important factors your lender will likely take into consideration when qualifying you for a home loan. Your income, job history and stability, and debt-to-income ratio (DTI) are just a few of the considerations that will be on the table during the approval process.
Given the price of homeownership in America, even a small decrease in interest rate could translate to thousands of dollars over the course of a 30-year loan. So if you can wait until your credit score improves, it might be a wise financial move.
Can I Get a Personal Loan with a 560 Credit Score?
Personal loans are a flexible way to borrow money for just about any purpose you desire. People take out personal loans, which are usually unsecured, for such reasons as:
• To cover the cost of home repairs and maintenance
• To pay for unexpected medical emergencies or car repairs
• To consolidate credit card debt
• To pay for a wedding, a special vacation, or other major event
While personal loans may feel like a good way to access a large chunk of money up front, keep in mind that they tend to have higher interest rates than secured loans, or those with some sort of collateral on the table, like auto loans and mortgages.
They also usually have more stringent qualification requirements, which means they may be harder to successfully apply for with a poor credit score. Typically, you need a credit score of 580 or higher to secure a personal loan. Given that a score of 560 is close to that mark, you could build your score and potentially secure greater loan access.
(You could also look into secured personal loans, which allow you to pony up your home, vehicle, bank account, or investments as collateral.)
Either way, it’s worth running the numbers on a personal loan calculator to ensure you understand how much you’re spending over the long term.
Recommended: Loans for Wedding Expenses
The Takeaway
While a credit score of 560 is technically in the “poor” category, that doesn’t mean you can’t access credit. You may be able to find funding, but typically at a higher interest rate than if your score were higher. That said, with effort, persistence, and on-time payments of existing loans, you can likely build your credit score and secure lower interest rates on future credit products.
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 .
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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