The Best HELOC Rates and Lenders in Alabama

A home equity line of credit, or HELOC, is a line of credit secured by the equity in your home. Like a credit card, HELOCs let you borrow up to a specific limit as often as needed. You can use your funds for various purposes, including debt consolidation and home improvements.

Advertising & Editorial DisclosureLast Updated: 12/6/2022
Edited By     |  

A HELOC can help finance considerable expenses such as home renovations, college education and medical bills, or be used to consolidate debt. Ultimately, how you'll use your home equity line of credit is up to you.

Before applying for a HELOC, it’s important to shop around and compare available lenders to find the best deal for your needs and situation. Currently, HELOC rates start from about 1% to 5%. Bank of America is MoneyGeek’s choice for the best overall HELOC lender in Alabama because of its low interest rates and discounts.

Home Equity Line of Credit (HELOC) Rates for 2023

When considering a HELOC, it’s crucial to compare lenders’ rates and terms to find the best option for you.

The table below shows an overview of home equity line of credit rates and pertinent lender information as of May 2022. Note that rates and other information may change in the following months, but they will be updated by MoneyGeek accordingly.

  • Lender
    APR
    Loan Amount
    Min. Credit Score Requirement
    Repayment Terms
    Annual Fees
    Pre-Approval Time
  • 3.75% to 18%

    $25,000–$1,000,000

    660

    10-year draw period
    and 20-year repayment period

    None

    Not specified

  • Not specified

    Not specified

    Not specified

    Not specified

    Not specified

    Not specified

  • 1.99% special
    introductory variable
    APR for 6 months,
    then as low as
    4.35% variable

    $25,000–$1,000,000

    Not specified

    10-year draw period,
    20-year repayment period

    Not specified

    Not specified

  • 3.65% to 8.80%

    $15,000–$750,000

    730

    10-year draw period,
    unspecified repayment period

    $90

    Not specified

  • 4.65% to 9.99%

    $35,000–$300,000

    620

    10 to 30 years

    None

    1 to 2 weeks

  • Starting at 3.99%

    $10,000–$500,000

    Not specified

    10-year draw period
    and 20-year repayment period

    $75

    Not specified

  • Starting at 4.64%

    $10,000–$500,000

    Not specified

    10-year draw period
    and 20-year repayment period

    None

    24 hours

  • Starting at 3.50%

    $15,000–$400,000

    620

    Five to 30 years

    3% to 4.99%

    24 hours

  • Starting at Prime - 0.50%

    Starting at $17,500

    Not specified

    10-year draw period,
    15-year repayment period

    $50

    Not specified

  • Starting at 3.34%

    Starting at $25,000

    740

    Not specified

    $50

    Not specified

  • 3.49% for 6 months
    (4.08% thereafter)

    Starting at $5,000

    Not specified

    15-year draw period
    with 15-year repayment period

    None

    24 hours

  • 3.75% to 10.63% variable

    $10,000–$500,000

    Not specified

    10-year draw period,
    and then 20 years for repayment

    None

    Not specified

MoneyGeek’s Picks for Best HELOC Lenders in Alabama

MoneyGeek rounded up the best home equity line of credit lenders in Alabama to help you choose one perfect for your needs and situation.

Keep in mind that not many lenders offer HELOCs, and those that do are usually national banks offering exclusively to borrowers with good to excellent credit scores. MoneyGeek recommends checking with your local credit unions for alternative options if a national lender rejects your HELOC application.

Best Overall HELOC Lender in Alabama: Bank of America


  • Bank of America

    Best for borrowers who want additional rate discounts.


    • 1.99% special introductory variable APR for 6 months, then as low as 4.35% variableAPR Range
    • $25,000 to $1,000,000Loan Amount Range
    • 10-year draw period; 20-year repayment periodRepayment Terms
    • NoneAnnual Fees
    • Not specifiedPre-Approval Time

    on Bank of America Website

Best HELOC Lender for Good Credit in Alabama: U.S. Bank


  • U.S. Bank

    Borrowers with good to excellent credit can take advantage of fixed rates.


    • 4.20% to 9.35%APR Range
    • $15,000 to $750,000Loan Amount Range
    • 10-year draw period; unspecified repayment periodRepayment Terms
    • $90Annual Fees
    • Not specifiedPre-Approval Time

    on U.S. Bank Website

Best HELOC Lender for Bad Credit in Alabama: Figure


  • Figure

    An excellent extended-payment option for borrowers with bad credit.


    • From 6.55% to 15.54%APR Range
    • $15,000 to $400,000Loan Amount Range
    • 5 to 30 yearsRepayment Terms
    • NoneAnnual Fees
    • 24 hoursPre-Approval Time

    on Figure Website

Best HELOC Lender for Competitive Rates in Alabama: PenFed


  • PenFed Credit Union

    PenFed features the lowest APR on offer for qualified borrowers.


    • 0.99% for 6 months; 4.25% to 18% thereafterAPR Range
    • $25,000 to $1,000,000Loan Amount Range
    • 10-year draw period; 20-year repayment periodRepayment Terms
    • $99Annual Fees
    • N/APre-Approval Time

    on PenFed Credit Union Website

HELOC vs. Home Equity Loans

Home equity loans (HELOANs) and HELOCs are excellent ways to finance major expenses, using your home as collateral. When choosing between the two, knowing their differences is critical in determining the best option for your situation.

A home equity loan is a lump sum given to the borrower all at once. It usually has fixed rates for interest and monthly payments over the life of the loan. A HELOAN is ideal for borrowers who prefer predictability and want to avoid overspending.

However, a home equity line of credit is a revolving credit line similar to a credit card. You can withdraw money as often as needed within a designated time frame, up to a specified limit (like a credit card), and pay back the amount you borrow. HELOC rates usually are variable, meaning they can change based on economic trends. This option is best for borrowers who are good at budgeting their money and want more flexibility than a home equity loan offers.

  • HELOC
    Home Equity Loan
  • Interest Rate

    Adjustable interest rate,
    but fixed-rate options are available

    Fixed interest rate

  • Monthly Payment

    Changes depending on
    the amount of money borrowed

    Fixed monthly payments

  • Repayment Terms

    During the draw period, borrowers pay
    interest on the money they borrowed;
    after the draw period, they repay any
    principal owed in addition to interest

    Repayment starts as soon as
    the money is given to the borrower

  • Fund Disbursements

    Line of credit

    Lump sum delivery

How to Apply for a HELOC

It’s often easy to apply for a home equity line of credit. Most lenders allow online applications in which the applicant submits basic information and waits for approval. MoneyGeek outlines the recommended steps when applying for a HELOC below.

1

Determine how much you need

Before applying for a HELOC, you must know your desired credit line amount and how you’ll use it. A HELOC can be used for various financial purposes, including debt consolidation, home renovations and college expenses.

2

Assess your financial standing

Evaluate your financial situation to see if you meet the minimum requirements for borrowing. This includes checking your credit score, income and current loan-to-value ratio since these factors play a role in determining your rates. By reviewing your financial standing, you’ll also determine if you have the means to repay what you’ll owe.

3

Shop around and compare lenders

Comparing HELOC lenders is the only way to find the best option for your needs and situation. Review their offerings, rates and terms. Be sure to consider each lender’s annual fees, closing costs and rate discounts.

4

Apply

Most HELOC applications can be completed online, but some lenders require you to call or visit a brick-and-mortar location. The application process typically includes submitting information about your income and assets.

5

Use funds wisely

Once you start withdrawing, staying within your means is best to avoid falling further into debt. Remember that you could lose your house if you fail to keep up with the payments.

Frequently Asked Questions About HELOCs

Understanding how a home equity line of credit works can be challenging for first-time borrowers, so MoneyGeek provided answers to some frequently asked questions below.

sources