Current HELOC Rates in Connecticut Today
CONNECTICUT HELOC RATES TODAY
Current HELOC 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 HELOC rates in Connecticut.
Key Points
• A home equity line of credit (HELOC) is a good way for homeowners to tap into their home’s equity for things like home improvements and debt consolidation.
• When comparing HELOC rates in Connecticut, the interest rate, fees, and terms are of critical importance.
• Connecticut HELOC rates are influenced by the prime rate, economic factors, and housing market conditions.
• To snag the best rates in Connecticut, it’s all about credit score, a steady income, and keeping the loan-to-value ratio in check.
• A HELOC monthly payment calculator and a HELOC interest-only calculator are helpful tools that can shed light on the costs and help borrowers make savvy decisions.
Introduction to HELOC Rates
One of the most popular ways to get equity out of your home is to obtain a home equity line of credit (HELOC). In this article, we’ll explain what is a home equity line of credit and take a look at the forces that shape current Connecticut HELOC interest rates, so that you can understand what’s out there. We’ll even address different types of home equity loans. You’ll come away understanding how to apply for a HELOC, and how to compare offers from different lenders. Armed with this information, you’ll be in a better position to make a smart financial decision about borrowing against your home equity.
What Is a HELOC?
A HELOC is a revolving credit line that is secured by the equity in your home. Because your home serves as collateral, you’ll likely find that HELOC interest rates are lower than those for personal loans. The ceiling on your credit line is based on the value of your home minus the outstanding mortgage balance. Many lenders allow homeowners to borrow up to 90% of this number. When considering a HELOC, it’s important to research the best HELOC rates in Connecticut to ensure you get the most favorable terms.
Unlike a traditional loan, a HELOC is not a lump sum allotment. You can borrow, repay, and borrow again during an initial draw period. Let’s take a closer look at HELOC draw and repayment periods, as they are different:
The Draw Period
Throughout the draw period, usually a decade long, you have the freedom to access funds up to your credit limit. Make payments to trim your balance, and if the need arises, borrow again. While interest payments are typically mandatory during this time, paying off the principal may be optional. This financial tool’s adaptability is what makes HELOCs so appealing.
The Repayment Period
Once the draw period ends, the repayment period begins. This is usually 10 to 20 years, during which time you can no longer borrow money and must start repaying the full loan amount, plus interest. The interest rates on HELOCs are usually variable, which means they can change over time. This can make it difficult to predict how much you’ll owe each month. A HELOC repayment calculator can help you understand what your payments will be based on how much of your HELOC you have used, your current interest rate, and the term.
The Origin of HELOC Interest Rates
HELOC interest rates are important, so it pays to know a little about where they come from. Banks and other lenders set a prime rate, which is shaped by Federal Reserve policy decisions. The prime rate is what they offer customers deemed to be at lowest risk of default. But not everyone gets this rate, and the interest rate any individual borrower is offered will depend on a number of other factors — we’ll get to those later.
How Interest Rates Impact HELOC Affordability
Interest rates play a significant role in the affordability of a HELOC. Over a 20-year repayment period, a mere 1% variance in the interest rate can translate to thousands of extra dollars in interest. Let’s imagine that you borrow $50,000 with a HELOC and enter a 10-year repayment period. The table below shows what payments would look like at varying interest rates:
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.50% | $620 | $24,391 |
| 8.00% | $607 | $22,797 |
| 7.50% | $594 | $21,221 |
HELOC Interest Rate Trends
HELOC interest rates usually move in sync with the prime interest rate, which has been anything but static in recent years, as you can see in the chart below. Keeping an eye on the average can help give you a sense of where Connecticut HELOC rates might be headed. Although the average prime rate hit a low of 3.25% in 2020, as you can see from the graphic below, it’s not often that it dips that far down.
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
In Connecticut, several factors influence HELOC rates. Understanding them can help you determine if the time is right for you to submit an application, and how much of a line of credit you might qualify for.
Home Equity
If you’ve been making payments on your home loan, you’ve likely built up some nice equity. Hopefully you have at least 15% to 20% equity in your property, because that is what you will need to qualify for a HELOC. If not, you might want to delay your application until you’ve built up a greater ownership stake.
Credit Score
To get the best available HELOC rate, you need a credit score of 680 or higher. Some lenders prefer a score of 700 or more. The higher your credit score, the less risk you pose to the lender. That means you’re more likely to qualify for the most competitive rates on a home equity line of credit in Connecticut.
Stable Income
Lenders are going to look at your income to help them determine your ability to repay the HELOC. A consistent and stable income is a good indicator that you are at a lower risk of default, which can lead to better home equity line of credit rates.
Loan-to-Value Ratio
Your loan-to-value (LTV) ratio is a big deal — it’s what helps determine how much you can borrow. To compute it, add your current mortgage plus the amount you’d like available as a line of credit. Then divide by your home’s value. Some lenders will require that your LTV be 85% or less. Others cap it at 90%.
Variable vs Fixed Interest Rates
HELOCs usually feature variable interest rates, meaning the interest rate can change over the life of the loan. While variable rates often start lower than fixed rates, they can fluctuate with the market. If the idea of an unpredictable rate stresses you out, take a good look at a home equity loan instead; these typically have a fixed rate.
Tools & Calculators
One way to understand how your HELOC or home equity loan interest rate in Connecticut might affect your monthly payments and the total cost of borrowing over the long haul is to use an online calculator. Try plugging different rates into one of these to get a feel for how rates and payment amounts are intertwined.
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 secure the best HELOC rates in Connecticut, you’ll need to make sure your credit score is in good shape, among other things. Here is some homework to do before you apply:
Tend to Your Credit Score
By keeping up with your payments and chipping away at those credit card balances, you’re not just tidying up your finances — you’re also nurturing your credit score. And guess what? A higher credit score means you’re a more attractive candidate for a home equity line of credit. Make time to review your credit reports and correct any inaccuracies as well.
Assess Your Home Equity
The first step in applying for a HELOC is to make sure you have at least 15% to 20% equity in your home. You can build equity by making your monthly mortgage payments or making home improvements. Equity also grows if the value of your home increases. The more equity you have, the better terms you may be able to get on a HELOC.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is a simple formula: your total monthly debt payments (car loan, student loan, etc.) divided by your gross monthly income. Some lenders allow a DTI below 50% and others require 36% or less, but generally the lower, the better. This number is a key player in determining your eligibility for a HELOC and the terms you might be offered.
Application Process for a HELOC in Connecticut
The application process for a home equity line of credit involves several steps, including an initial evaluation of your financial situation, a formal application, and a home appraisal. Here’s a closer look at the process.
Step 1. Crunch the Numbers
Before you take the plunge and apply for a home equity line of credit, it’s crucial to size up your financial standing by compiling your credit score and DTI ratio info. Some lenders offer the convenience of a prequalification process for a HELOC online, which can help you figure out if your stats will pass muster.
Step 2. Compare Lenders
Look at posted interest rates, sure, but also check on lenders’ qualification demands, loan limits, fees, and the duration of draw and repayment periods to get a sense of which lenders might be the best fit for you.
Step 3: Gather Your Documents
Before you apply for a home equity line of credit, you’ll need to gather the following documents: recent pay stubs, your most recent tax return, recent mortgage statement, and bank statements. If you are self-employed, have at least two years of tax returns close at hand. Having these documents when you apply will help make the process go more smoothly.
Step 4: Submit Your Application
Once you’ve got all your ducks in a row, it’s time to submit your application. You can do this online, over the phone, or in person — it depends on the lender and your preference. Just make sure you double-check everything before you hit “send” or “submit” to avoid any hiccups going forward.
Step 5: Get an Appraisal
The home appraisal is key to the HELOC process, as your home’s market value helps determine how much equity you have and how much credit a lender might be willing to provide.
Step 6: Prepare for Closing
Before you can get your hands on the cash, you’ll need to sign the paperwork and take care of any fees. The good news is, many lenders are quick to get the funds to you — often within just three business days of the signing.
Tax Benefits and Considerations
If you’re using your HELOC funds to buy, build, or significantly improve your home, you can deduct the interest paid on the first $375,000 borrowed by individual taxpayers ($750,000 if you’re married and filing jointly). It’s always a good idea to consult with a tax advisor to get the specifics and ensure you’re making the most of any deductions related to your home equity line of credit.
Closing Costs and Fees
HELOC closing costs are generally more affordable than those associated with buying a home. The most significant cost is typically the appraisal fee, which can range from $300 to $600. You may also encounter application, origination, and administrative fees. Some lenders might add annual maintenance fees or other charges.
Alternatives to HELOCs
Besides HELOCs, you have other financing options, including home equity loans, cash-out refinancing, and personal loans. Each of these has its own set of benefits and drawbacks:
Home Equity Loan
Unlike a HELOC, a home equity loan furnishes you with a fixed lump sum. A bit more about what is a home equity loan: Generally, you can tap into up to 85% of your home’s equity with this type of loan. The qualification process is similar to that for a HELOC (you will need an appraisal). Another factor in any HELOC vs. home equity loan comparison: You repay a home equity loan starting immediately, and because a home equity loan has a fixed interest rate, the payments will be the same over the loan term, which is anywhere from five to 30 years. To get a sense of what you could borrow and to compare the two options, use a home equity loan calculator.
Cash-Out Refinance
For homeowners, cash-out refinancing is another good way to leverage your home’s value. This special type of mortgage refinance is a good option for those who need a large sum of money all at once. When comparing cash-out refinancing vs. a home equity line of credit, note that cash-out refinancing might come with a higher interest rate than you have on your current home loan. You’ll want to look at the monthly payment and total interest paid with a cash-out refi vs. a home equity loan or HELOC to determine which makes the most sense. Some borrowers like a cash-out refi because it leaves them with one payment to keep track of instead of two.
Personal Loan
A personal loan is a flexible loan with fixed payments, typically made over 2 to 7 years. It can be used for almost any purpose. One advantage is that you don’t have to offer your home as collateral to get this loan. However, personal loans tend to have higher interest rates than HELOCs or home equity loans.
Credit Cards
Credit cards often have steeper interest rates than HELOCs, which can balloon your costs if you’re juggling a hefty balance. While credit cards are handy for everyday buys, HELOCs win out when it comes to big-ticket items like home upgrades or debt consolidation.
The Takeaway
A HELOC is a helpful and very flexible way to tap into your home equity. It’s especially useful if you need to borrow but aren’t sure exactly how much you need. You’ll only pay interest on the amount of the credit line you are using at any given time. With thorough preparation and attention to your credit score and debt levels you can present an application that will get you the best available rate in Connecticut.
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?
With an 8.00% interest rate and a 10-year term, your monthly payment will be about $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 you $418 per month, although you would pay more total interest with the 20-year term.
Is a HELOC a good idea right now?
Whether a HELOC is a good idea right now depends on your financial situation and goals. HELOCs can be beneficial for home improvements, debt consolidation, or other large expenses. However, it’s important to consider the interest rates, fees, and potential impact on your home equity line of credit before making a decision.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 HELOC depends on the interest rate and how long a term you’ve chosen. At a 6.00% interest rate over 20 years, the payment would be $716 per month. An interest rate of 8.00% and the same term means a payment of $836.
What are the benefits of a HELOC?
A HELOC is a very flexible way to borrow. Rather than take out a lump sum, you can borrow in increments according to your needs, and at a rate that is typically lower than you would get with a credit card. Best of all, you only pay interest on what you borrow at any given time.
Do you need an appraisal for a HELOC?
Yes, you do. The appraisal is a crucial step in the process, as it helps to establish the value of your home, which in turn determines the amount you can borrow. Lenders want to make sure your loan is secured by enough equity in your home. Your lender will provide details about what type of appraisal is required.
What might prevent you from getting a home equity loan?
There are several factors that can disqualify you from getting a home equity loan, including bad credit, not enough equity in your home, and a high level of debt relative to your income.
How hard is it to get a HELOC?
Assuming you can meet lenders’ requirements of a healthy credit score and debt levels, and you have a minimum of 15% equity in your home, it shouldn’t be hard to get a HELOC. The hardest part for many would-be borrowers is compiling the financial documents needed for the application. But taking the time to do that thoroughly and accurately will help move the application process along more quickly.
Does HELOC affect credit score?
When you apply for a HELOC, the lender will perform a hard inquiry on your credit report, which could cause a small, temporary decrease in your credit score. Carrying a large balance on your HELOC could also negatively impact your credit utilization ratio and lower your credit score. But making regular payments toward your HELOC will show you can use credit responsibly and 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 .
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-Q424-017
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
-
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 Wisconsin Today
WISCONSIN HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
Wisconsin.
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 Wisconsin.
Key Points
• Home equity loans allow homeowners to borrow against their home’s equity for high-cost projects, such as home renovations, education, and debt consolidation.
• Home equity loan interest rates are influenced by the prime rate, the borrower’s creditworthiness, and overall market conditions.
• To qualify for the lowest rates, it’s important to build a strong credit score, manage debt-to-income ratio, obtain adequate property insurance, and maintain sufficient home equity.
• Home equity loans typically have fixed interest rates, ensuring consistent monthly payments throughout the loan tenure.
• Alternatives to home equity loans include HELOCs, HECMs, and cash-out refinances, each with its own features and eligibility criteria.
Introduction to Home Equity Loan Rates
Welcome to our guide on Wisconsin home equity loan rates. We’re here to help you understand how to leverage the equity in your home, the interest rates you can expect, and tips on how to get the best deal. We’ll also discuss some alternatives to home equity loans that might be a good fit for your needs.
To begin, let’s look at what is a home equity loan.
How Do Home Equity Loans Work?
Home equity loans can be a smart financial move: By using your home as collateral, homeowners secure lower interest rates than on personal loans. If you’re still paying off your first home loan, a home equity loan is considered a second mortgage. These loans come with fixed interest rates and flexible repayment terms, typically ranging from 5 to 30 years.
To qualify, homeowners need at least 20% equity in their property. If you’re approved, the funds can cover an array of expenses, from renovations to education, medical bills, and debt consolidation.
Recommended: Cash-Out Refinance vs Home Equity Line of Credit
Where Do Home Equity Loan Rates Originate?
Home equity loan interest rates are a product of multiple economic factors, with the prime rate playing a significant role. The prime rate is what banks charge their most creditworthy clients. Federal Reserve policy decisions on interest rates can also sway home equity loan rates. By understanding these influences, homeowners can better anticipate rate shifts and make well-informed decisions about the timing of your home equity options.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure can have a significant impact on your ability to afford a loan over its full term. Over a standard 20-year home equity loan, for example, a 1% difference in the interest rate can mean a higher monthly payment. Even more significant, that seemingly small difference can add up to an extra $11,000 in interest paid over the life of the loan, as illustrated in the chart below.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.00% | $627 | $75,559 |
| 7.50% | $604 | $70,007 |
| 7.00% | $581 | $64,554 |
Home Equity Loan Rate Trends
The prime interest rate is a moving target, and its fluctuations are a crystal ball of sorts for predicting the future of home equity loan rates. By keeping a close eye on the prime rate, you can gain valuable insights into what the future holds for your borrowing options. This knowledge can empower you to make more informed financial decisions.
Historical Prime Interest Rates
Since 2018, the prime rate has dipped to a low of 3.25% in 2020 and peaked at 8.50% in 2023. This fluctuation is a reflection of the ever-changing economic climate and the Federal Reserve’s continuous efforts to keep things steady. These tweaks have a ripple effect, influencing the rates of adjustable-rate mortgages, credit cards, corporate loans, and various home equity options.
| 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
The graphic below shows that the prime rate has not been above 10% since the 1980s.
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
Besides the prime rate, a variety of other factors help determine your home equity loan rate, such as your credit score, loan-to-value ratio, home value, home value stability, property location, and lender policies. Lenders carefully consider these elements when setting the interest rate and terms of a home equity loan, as they provide a comprehensive view of your financial standing, the value of your property as collateral, and the overall risk of the loan.
These same factors also influence the rates and terms of a HELOC (home equity line of credit), which is another way to get equity out of your home.
Credit Score
The better your credit score, the more favorable your interest rates. Lenders often look for a minimum of 680, but many prefer 700 or higher. Why? Because a higher score means you’re less likely to default, which makes you a more attractive candidate for a loan.
Home Value
Lenders often use independent appraisals to help determine the value of a home and the amount of equity a homeowner has. This helps them set appropriate loan limits. The more equity you have, the more you may be able to borrow.
Loan-to-Value (LTV) Ratio
The LTV ratio is a critical factor in determining the maximum loan lenders will permit. In Wisconsin, most lenders cap your combined LTV (your mortgage balance plus loan amount divided by your home value) at around 85%.
Let’s say you currently owe $300,000 on your mortgage and you want to borrow $75,000 for a renovation project. Your home is appraised at $450,000:
$300,000 + $75,000 = $350,000
$375,000 / $450,000 = 83%
At 83% combined LTV, there is a good chance a lender will approve a home equity loan.
Home Value Stability
The ups and downs of home values impact the equity you’ve built in your home. When the housing market is on the upswing, lenders are often more willing to approve larger loans, as the increasing value of your property can act as a safety net. But when home values dip, lenders might tighten their belts, leading to more stringent criteria and potentially smaller loan amounts.
Property Location
Living in an area with a high risk of natural disasters or other hazards can lead to higher interest rates. Lenders may charge more in interest to offset the risk of lending in these areas. High-risk areas can include places that are prone to natural disasters, such as hurricanes, floods, and wildfires.
Lender Policies
When you’re looking at home equity options in Wisconsin, it’s important to consider lender policies. They can have a big impact on the interest rate you’re offered. To make sure you’re getting the best deal, compare interest rates, fees, and closing costs from several lenders. Do your homework, and you can get the most favorable terms for your home equity options in Wisconsin.
How to Qualify for the Lowest Rates
To qualify for the best home equity loan rates in Wisconsin, you’ll need to have a strong credit score, a low debt-to-income ratio, adequate property insurance, and a good amount of equity in your home. By making sure you meet these qualifications, you’ll be able to get the best loan terms for your needs and enjoy the financial flexibility and peace of mind that come with homeownership.
Build a Strong Credit Score
A robust credit score is your ticket to more attractive interest rates on home equity loans. On the flip side, a lower credit score might mean higher rates or even a rejection. That’s why it’s key to keep your credit score in tip-top shape by paying your bills on time, checking your credit report regularly, and not maxing out your credit cards.
Manage Debt-to-Income (DTI) Ratio
Your DTI ratio is a crucial factor in determining your eligibility for a home equity loan. This ratio, which compares your gross monthly income to your monthly debt payments (auto loan, student loan, personal loan, etc), gives lenders a clear picture of your financial health. Most lenders require a DTI of 36% or less to approve a home equity loan. However, some lenders may offer home equity loans to borrowers with a DTI between 36% and 50%, but charge higher rates and fees.
Obtain Adequate Property Insurance
It’s standard practice for home equity lenders in Wisconsin to require property insurance, especially in areas prone to flooding. These policies are designed to protect you and your lender from potential financial losses due to damage or destruction of your property. It’s a good idea to review your coverage before applying for a home equity loan or HELOC.
Maintain Sufficient Home Equity
To qualify for a home equity loan in Wisconsin, you’ll need to have at least 20% equity in your home. The 20% equity requirement is in place to protect borrowers from taking on more debt than they can handle and to protect lenders from the risk of default. A home equity loan calculator can help you determine your equity level.
Fixed vs. Variable Interest Rates
Home equity loans typically come with fixed interest rates, which means you can count on steady, predictable monthly payments for the life of the loan. While fixed rates offer peace of mind, they often start out higher than variable rates, which can be more affordable at the outset. This is something to consider if you’re looking for a home equity loan in Wisconsin and want to know exactly what your payments will be.
Tools & Calculators
Use the helpful tools and calculators to find out how much you can borrow and what your payments will be, and to compare different loan options. 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.
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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.
-
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 typically range from 2% to 5% of the loan amount. These include a variety of fees such as the appraisal, credit report, document preparation, origination, notary, title search, and insurance.
Loan origination fees may be around 0.5% to 1% of the loan amount, or a flat fee. Title insurance is another cost, typically 0.5% to 1% of the loan balance, with title search fees ranging from $100 to $250. Appraisal fees can be between $300 and $500, and credit report fees are usually $50 to $100. Make sure to factor these into your calculations when determining the cost of your home equity loan.
Tax Deductibility of Home Equity Loan Interest
Good news: The interest you pay on a home equity loan can be tax-deductible if it’s used for home improvements. If you’re married and filing jointly, you can deduct interest on loans up to $750,000. Single filers can deduct interest on loans up to $375,000. Just remember, you’ll need to itemize your deductions to claim this benefit.
Alternatives to Home Equity Loans
There are a few different types of home equity loans and lines of credit. Home equity lines of credit (HELOCs), home equity conversion mortgages (HECMs), and cash-out refinances all have unique features and requirements. Each option has its own pros and cons, so it’s important to consider your specific financial situation and needs.
Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) can be another smart financial move. You can borrow up to a certain limit and pay interest only on the amount you use. During the draw period, you can pay down the principal balance, making more money available to borrow. One drawback: Variable interest rates can change, so your monthly payments may go up. Here’s a HELOC vs home equity loan comparison at a glance:
| 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, a government-insured reverse mortgage, is an option for those 62 and older to receive payments from the lender based on their home’s value. The funds can be received in various ways: a lump sum, regular payments, or a line of credit. Unlike Wisconsin home equity options and HELOCs, HECMs don’t require monthly payments, only becoming due when you leave the home. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A type of mortgage refinance, cash-out refinance is a new mortgage that pays off your old one and lets you pocket the difference. Most lenders will let you borrow up to 80-85% of your home’s equity. Wisconsin home equity options and HELOCs require at least 20% equity, while reverse mortgages have no equity requirement but do have an age stipulation.
The Takeaway
In Wisconsin, home equity loans are a great way to leverage the equity in your home for a variety of financial needs. Understanding how home equity loans work and how to get the best interest rates are key to making a smart decision that’s right for your financial situation. Shopping around to compare rates, fees, and closing costs can also be enlightening and ensure you get the best available deal.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What would my monthly payment be on a $50,000 loan?
With a $50,000 home equity loan, you have to consider the interest rate and loan term, as these will greatly affect how much you’ll pay each month. An 8.00% interest rate and a 10-year term would mean a monthly payment of $607. Score a 6.00% rate and choose a 20-year term and you’d pay $358 per month.
What is the monthly payment for a $100,000 HELOC?
The monthly payment on a $100,000 HELOC will depend on the current market interest rate and how much of the line you have used. If you used the entire $100,000 and repaid it over 20 years at 7.00% interest, you would need to come up with $775 per month. To get a rough estimate of your monthly payment, you can use the calculator shown above.
What is the payment for a $25,000 home equity loan?
When considering a home equity loan, it’s important to consider the current interest rate and the term of the loan, as they will affect your monthly payment. To give you an idea, an 8.50% interest rate repaid over 10 years would give you a $310 monthly payment.
What would the payment be on a $30,000 home equity loan?
When you’re thinking about a $30,000 home equity loan, it’s important to consider how the interest rate and loan term will affect your monthly payment. But if you had a 7.00% interest rate and repaid the loan over 10 years, you’d pay about $348 per month.
What might disqualify you from securing a home equity loan?
There are a few things that can prevent you from getting a home equity loan, including having a poor credit history, not having enough equity in your home, having a high debt-to-income ratio, and not having enough insurance on your home. These factors can make it harder for you to get a home equity loan, so it’s important to consider them before you apply.
What are the benefits of a HELOC?
Home equity lines of credit, or HELOCs, are a great way to access the equity in your home. They offer flexibility in borrowing, lower interest rates than most credit cards, and the option to pay interest only on the money you actually borrow. These features make HELOCs a popular choice for homeowners looking for a cost-effective way to borrow.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q424-109
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 Oklahoma Today
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Oklahoma HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
Oklahoma.
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 Oklahoma.
Key Points
• Home equity loans allow homeowners to borrow against the equity in their homes.
• Home equity loan rates are influenced by the prime rate and economic conditions, including the local real estate market.
• To qualify for the lowest rates, it’s important to have a strong credit score, manage debt-to-income ratio, obtain adequate property insurance, and maintain sufficient home equity.
• Home equity loans offer fixed interest rates, providing stability and predictability in monthly payments, while HELOCs have variable rates that can fluctuate.
• Alternatives to home equity loans include HELOCs, HECMs, and cash-out refinances, each with its own features and eligibility criteria.
Introduction to Home Equity Loan Rates
Ready to learn how to get equity out of your home in Oklahoma? This guide is your introduction to home equity loan rates in the Sooner State — how they are determined, what factors influence them, and (especially key) how you can qualify for the best home equity loan rate possible. We’ll also show you the tools that are available to help you determine how much you can borrow and whether you qualify.
First, let’s make sure you understand the basics: What is a home equiy loan?
How Do Home Equity Loans Work?
A home equity loan is a loan that uses your home as collateral, which is why home equity loans typically offer lower interest rates than most unsecured personal loans. With a fixed rate, home equity loans offer a consistent, predictable repayment schedule. In order to take advantage of a home equity loan, you’ll need at least 20% equity in your primary residence to qualify — so it helps to pay off your home loan for a while before you apply. Many Oklahomans use these loans for renovations, education, medical bills, or debt consolidation.
You might be wondering, is a home equity loan the same thing as a home equity line of credit? The short answer is no. But we’ll get to what is a home equity line of credit in more detail below.
Where Do Home Equity Loan Interest Rates Originate?
The all-important home equity loan interest rate that drives the cost of your loan is not an arbitrary number; the interest rate a borrower is offered is influenced by a variety of economic factors. The cascade starts with the Federal Reserve. Fed policy on its rates helps drive the prime rate, which is the interest rate that banks charge their most creditworthy customers. Lenders have their prime rate, and then adjust it based on an individual borrower’s qualifications.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure can have a big impact on your ability to pay down your loan. For example, a 20-year home equity loan of $100,000 with an interest rate of 7.50% would mean a monthly payment of $806. The table below shows you how that monthly payment will change if you alter the loan amount, interest rate, or loan term.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.50% | $620 | $24,391 |
| 8.00% | $607 | $22,797 |
| 7.50% | $594 | $21,221 |
Home Equity Loan Rate Trends
The prime interest rate is a key player when it comes to Oklahoma home equity loan rates. By keeping an eye on changes to the prime rate and understanding its historic ups and downs, you can make an informed decision about the right time to apply for an Oklahoma home equity loan.
The chart below shows the prime rate in recent years. It bottomed out at 3.25% in 2020 and peaked at 8.50% in 2023. The graphic below shows a much longer period of time: 50-plus years. As you can see, rates as low as 3.25% haven’t come around very often.
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
As noted above, several factors, such as credit score, loan-to-value ratio, home value, home value stability, property location, and lender policies, influence home equity loan rates. Many of these are within your control (unlike the prime rate), so it’s worth looking at them closely:
Credit Score
If you’re the kind of person who’s diligent about making timely payments, you’re in luck. Lenders are more inclined to offer you a better interest rate. They generally look for a credit score of 680 or higher, but many will be more impressed if you’re at 700 or above.
Home Value
To figure out how much you can borrow, lenders will request an appraisal to determine your home’s value. This will help them establish your equity and the maximum loan amount they’re willing to approve.
Loan-to-Value (LTV) Ratio
Once you know your home value, the LTV ratio can be calculated by taking the loan amount (the amount you owe on your first mortgage plus the amount you want to borrow with a home equity loan) and dividing it by your home’s appraised value. For a home equity loan, you generally want the answer to be less than 85%.
Home Value Stability
The stability of home values can significantly impact the amount of equity homeowners can access and utilize. When home values are on the rise in your part of Oklahoma, lenders may be more inclined to approve larger loan amounts, as the increased value of the property reduces the perceived risk. Conversely, if home values have been declining, lenders may be more conservative.
Property Location
Living in a place with a history of natural disasters or extreme weather can mean higher interest rates. Lenders may see these areas as risky, which can mean you’ll pay more over the life of your loan. If you live in an area with a high risk of flooding, tornadoes, or wildfires, you may have a more challenging time finding the lowest rates in Oklahoma.
Lender Policies
When you’re looking for a home equity loan, it’s important to consider how a lender’s policies will impact the interest rate you are offered. To make a smart decision, you should shop around and compare interest rates, fees, and closing costs from different lenders. By doing your homework and comparing your options, including home equity rates in Oklahoma, you can find the loan that’s right for you and may save money in the long run.
How to Qualify for the Lowest Rates
To qualify for the best Oklahoma home equity loans rates, there are a few things you should keep in mind. Tick off everything on this to-do list and you should be in good shape:
Build a Strong Credit Score
A higher credit score can lead to more favorable interest rates on home equity loans. Check your credit report and correct any inaccuracies before applying for a home equity loan. Avoid using the maximum on all your credit cards at once. And above all, pay your bills on time.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a key player in loan approval. It’s a simple calculation: Add up your monthly debts (car loan, student loan, etc.) and divide by your gross monthly income. You’re looking for a number under 50% — and under 36% is even better for a home equity loan.
Obtain Adequate Property Insurance
Lenders want to know their investment is protected, especially in high-risk areas, so make sure your homeowner’s insurance is up to date.
Maintain Sufficient Home Equity
You’ll need at least 20% equity in your residence to qualify for a home equity loan, as we’ve seen. When you’re computing your equity to make sure you hit this number, remember to use the current estimated value of your home.
Fixed vs. Variable Interest Rates
Home equity loans typically feature fixed interest rates, so monthly payments remain constant throughout the loan’s life. While fixed interest rates offer stability, they may result in higher initial rates compared to variable rates, which can start lower but fluctuate over time. A home equity line of credit (HELOC) usually offers variable interest rates. Depending on your comfort level with changing monthly payment amounts and the direction you think interest rates are headed, one or the other of these options will be more suitable for you.
Tools & Calculators
By using our online tools and calculators, you can get a better idea of your eligibility for a home equity loan or HELOC, the amount you may be able to borrow, and your monthly payments. Play around with these helpful tools before you submit a loan application.
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 range from 2% to 5% of the loan amount. These may include fees for services such as appraisals, credit reports, document preparation, origination, notary, title search, and title insurance. Every lender’s fee schedule is different, so it’s important to consider not only what interest rate you are being offered but also the lender’s fee schedule when you are weighing one loan option against another.
Tax Deductibility of Home Equity Loan Interest
Here’s the scoop: The interest you pay on a home equity loan could be tax-deductible if you’re using the funds to buy, build, or improve your home. If you’re married and filing jointly, you can deduct interest on loans up to $750,000; for single filers, the number is $375,000. To benefit from this deduction, you’ll need to itemize your deductions on your tax return.
Alternatives to Home Equity Loans
Beyond the conventional home equity loan, there are different types of home equity loans at your disposal. Each comes with its own set of features and eligibility requirements.
Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) is like a credit card. The lender will approve you for a certain amount of credit, and you can borrow up to that limit. You are not required to take the full amount of the HELOC. You will only pay interest on the amount you have borrowed. A HELOC has a variable interest rate that changes with the prime rate. If the prime rate goes up, your interest rate goes up and your payment will increase. Here’s a quick look at 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 |
Home Equity Conversion Mortgage (HECM)
An HECM is a government-backed reverse mortgage option for those 62 and older. With an HECM, you can receive payments from the lender based on your home’s value. The beauty of it is that you don’t have to repay the loan until you leave your home. This sets it apart from Oklahoma home equity loans and HELOCs, which require regular payments. While HECMs may have higher closing costs and longer processing times, the benefits are worth considering. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
This special type of mortgage refinance gives you a new mortgage that pays off your old one and an additional lump sum that you can use however you wish. Lenders usually permit borrowing up to 85% of your home’s value. If you’re considering a cash-out refinance vs. a home equity line of credit, the rate you have on your current mortgage is an important
The Takeaway
If you’re a homeowner in Oklahoma, you can make the most of your home equity by learning about home equity loan rates in Oklahoma and the factors that influence them. By comparing lenders, using online tools, and considering all financing options, you can make an informed decision about your home equity loan.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What will you be paying each month on a $50,000 home equity loan?
The interest rate and loan term will determine what the monthly payment is on a $50,000 home equity loan. An 8.00% interest rate and a 10-year term would mean a monthly payment of $607. If the interest rate was 7.00%, the monthly payment would change to $581.
What is the monthly payment on a $100,000 HELOC?
Your monthly payment on a $100,000 HELOC will fluctuate based on the current interest rate and how much of your credit line you’ve used. Consider using a HELOC Monthly Payment Calculator, which can take these variables into account and provide an accurate projection.
What is the payment on a $25,000 home equity loan?
If you’re thinking about a $25,000 home equity loan, it’s a smart move to shop around and compare interest rates and loan terms to find the right loan for your financial needs. If you paid back the loan over a decade, at an interest rate of 6.50%, you would pay $284 per month. But changing either the term or rate would change the payment amount, as well as how much interest you pay over the life of the loan.
What would the payment be on a $30,000 home equity loan?
A 10-year term and 8.00% interest rate would equal a monthly payment of $364. A 7.00% interest rate would cost you $348 per month over the same time period.
What might disqualify you from getting a home equity loan?
Generally speaking, lenders want to see that you have a history of making on-time payments and being financially responsible. Having a bad credit score, lacking adequate equity in your home, being burdened by a high level of debt, or not having insurance on your property could all be disqualifying factors.
What are the benefits of a HELOC?
A home equity line of credit (HELOC) has a lot of benefits, including a lower interest rate than a credit card and the ability to only pay interest on the money you borrow. If you know you need cash on hand for an upcoming project or expense but you aren’t sure exactly how much, a HELOC can be an especially flexible option.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q424-096
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.
Resolution 2025: Get Rid of Bad Debt
As you may have read, we’re wrapping up the year by helping you think big-picture about your financial health. The goal is to make it easy for you to evaluate, and maybe even lay the groundwork for a New Year’s resolution or two. To that end, we’re dedicating one article to each of the three main aspects of your finances: spending, debt and investing for your future. Up today, debt.
As stressful as it can be to owe money, debt is a very conventional part of American life. When used responsibly, it can be an important tool to help you achieve milestones like owning a home.
But some debt has the opposite effect. The interest you owe can become a slippery slope, pushing your balances ever higher and derailing your financial goals completely.
If your debt is overwhelming you, the first step is to determine which type of debt is the problem. Good debt includes loans you took out as part of an investment in your future: a mortgage on your home or a loan for a college degree, for example. Bad debt, on the other hand, usually leaves you with little to show for it. The things you used it for may have depreciated in value — or just led to more debt. The best example of this is high-interest credit card debt.
Next, take an inventory of everything, including credit cards, car loans, personal loans, student loans, mortgages and medical debt. Note the balances, interest rates, and minimum payments.
Then, consider how you might be able to extricate yourself. The avalanche method, where you focus on paying off the debt with the highest interest rate first, usually makes the most financial sense, but there are other options too. In the debt fireball method, you concentrate on the bad debt first, and in the snowball method, you hone in on the smallest balance first. (This last one has more of a psychological benefit, giving you momentum and a sense of accomplishment.)
You may also want to explore refinancing your loans at lower interest rates, getting a debt consolidation loan, or as a very last resort, seeking a debt settlement.
So what? Debt gets a bad rep, but it’s not always bad for you. When it is, don’t lose hope — there are ways to get out from under. And remember, bad debt doesn’t exist in a vacuum. Usually it stems from a mismatch between your spending and income. So take the time to examine any non-essential expenses. If you can pay off more debt by cutting back, it’ll be well worth it in the long run.
Related Reading
• Dear SoFi, I’m Overwhelmed by Debt. Can You Help Me? (SoFi)
• Debt Management Guide (Investopedia)
• Paying Off Debt Is the Hardest in These States: Survey (News Nation)
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
photocredit: iStock/ediebloom
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Opening an account is quick and easy. All we need are a few pieces of information such as name, home address, and Social Security number. In some cases, we may need additional documentation like a copy of your driver’s license, and/or a current photo ID to verify your identity.
As long as you direct deposit your pay or add $5,000 every 30 days, you’ll earn 3.60% APY on your savings & Vaults balances and 0.50% APY on your checking balances.* If you do not have a direct deposit or $5,000 in deposits every 30 days, you’ll earn 1.00% APY on savings & Vaults balances and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. Additional information can be found at sofi.com/legal/banking-rate-sheet.
Making a cash deposit into your SoFi Checking & Saving account is fast, easy, and secure. With the help of Green Dot, you can make a cash deposit at participating retailers nationwide using your SoFi debit card. More details here.
No. SoFi account holders don’t pay any overdraft fees, minimum balance fees, monthly service fees, or ATM fees.
You can use any one of the 55,000+ Allpoint ATMs to withdraw money from your SoFi checking account, fee-free.^
Yes! Every checking account also comes with a high-yield savings account that has an up to 3.60% APY.† We don’t currently offer standalone checking or savings accounts.
When you sign up for a SoFi online bank account, you will receive both a checking account and a savings account. We do not currently offer standalone checking or savings accounts.
You can earn 3.60% APY (annual percentage yield) on savings (including Vaults) balances, and 0.50% APY on your checking balances with direct deposit. That’s 9x the national average savings account rate!9
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