A HELOC is frequently used to finance substantial expenses, such as home improvements, education costs, hospital bills, debt consolidation and others. It’s a great option for financially responsible homeowners that have a significant amount of home equity.
MoneyGeek’s comprehensive review discovered that lenders in Colorado have home equity line of credit rates that range from 0.99% to 18%, with Bank of America being the best HELOC lender overall.
Prior to setting up a home equity line of credit, it is essential to find a lender that meets your requirements. You should compare lenders’ rates to ensure that you're receiving the best offer for your HELOC.
Home Equity Line of Credit (HELOC) Rates for 2023
The table below displays each lender’s HELOC requirements, equity rates and repayment terms as of May 2022.
Although we at MoneyGeek frequently update our pages with the latest data, this information is subject to change. You should always verify any information with your preferred lender.
Lender | APR | Loan Amount | Min. Credit Score Requirement | Repayment Terms | Annual Fees | Pre-Approval Time |
|---|---|---|---|---|---|---|
3.75% to 18% | $25,000 to $1,000,000 | 660 | 10-year draw period and | None | N/A | |
Not specified | Not specified | Not specified | Not specified | Not specified | Not specified | |
1.99% special | $25,000 to $1,000,000 | Not specified | 10-year draw period, | Not specified | Not specified | |
3.65% to 8.80% | $15,000 to $750,000 | 730 | 10-year draw period, | $90 | Not specified | |
Starting at 3.99% | $10,000 to $500,000 | Not specified | 10-year draw period and | $75 | Not specified | |
Starting at 4.64% | $10,000 to $500,000 | Not specified | 10-year draw period and | None | 24 hours | |
Starting at 3.50% | $15,000 to $400,000 | 620 | 5 to 30 years | 3% to 4.99% | 24 hours | |
Starting at Prime - 0.50% | Starting at $17,500 | Not specified | 10-year draw period, | $50 | Not specified | |
Starting at 3.34% | Starting at $25,000 | 740 | Not specified | $50 | Not specified | |
3.49% for 6 months | Starting at $5,000 | Not specified | 15-year draw period with | None | 24 hours | |
3.75% to 10.63% variable | $10,000 to $500,000 | Not specified | 10-year draw period, | None | Not specified |
MoneyGeek’s Picks for Best HELOC Lenders in Colorado
MoneyGeek’s guide will help you find the best lender for a home equity line of credit depending on your financial circumstances and objectives. Aside from national banks, there aren’t many providers who offer HELOCs. If your application is denied by a national lender, you should check with your local credit union to see if they offer HELOC loans.
Best Overall HELOC Lender in Colorado: Bank of America
- Bank of America
Bank of America provides an introductory APR of 1.99% for six months.
- 7.49% (introductory rate) then 9.90%APR Range
- Generally $25,000 to $1,000,000Loan Amount Range
- 10-year draw period; 20-year repayment periodRepayment Terms
- NoneAnnual Fees
- UndisclosedPre-Approval Time
Best HELOC Lender for Good Credit in Colorado: U.S. Bank
- U.S. Bank
U.S. Bank allows you to apply for a HELOC over the phone, online or in person.
- 8.95% to 12.70%APR Range
- $15,000 to $750,000 ($1 million in California)Loan Amount Range
- 10-year draw period; up to 30 years repayment periodsRepayment Terms
- Up to $75Annual Fees
- UndisclosedPre-Approval Time
Best HELOC Lender for Bad Credit in Colorado: Figure
- Figure
Figure's minimum credit score requirement of 620 is one of the lowest compared to other lenders.
- 6.10% to 14.74%APR Range
- $20,000 to $400,000Loan Amount Range
- 5 to 30 yearsRepayment Terms
- NoneAnnual Fees
- 24 hoursPre-Approval Time
Best HELOC Lender for Competitive Rates in Colorado: PenFed
- PenFed Credit Union
PenFed Credit Union provides an introductory APR of 0.99% for the first six months.
- Starting at 8.625%APR Range
- $25,000 to $500,000Loan Amount Range
- 10-year draw period; 20-year repayment periodRepayment Terms
- $99Annual Fees
- UndisclosedPre-Approval Time
HELOC vs. Home Equity Loans
Even though they appear to be similar, a home equity loan (HELOAN) and a home equity line of credit serve different purposes.
HELOANs permit a homeowner or borrower to lend against the equity in their home. Moreover, this type of loan contains fixed interest rates and terms of payback. The bank disburses the money to the borrower as a lump sum.
In contrast, a HELOC functions like a credit card. Borrowers can only withdraw a certain amount of money during the draw time. Additionally, HELOCs have adjustable interest rates. As a result, the borrower is not required to make regular monthly installments during the payback period.
HELOC | Home Equity Loan | |
|---|---|---|
Interest Rate | Adjustable interest rate, | Fixed interest rate |
Monthly Payment | Changes depending on the | Fixed monthly payments |
Repayment Terms | During the draw period, borrowers pay | Repayment starts as soon as |
Fund Disbursements | Line of credit | Lump sum delivery |
How to Apply for a HELOC
Lenders typically allow online applications for HELOCs, which makes the process easier. As part of the application, you must submit your personal information, including contact details, proof of employment and financial documentation. The steps recommended by MoneyGeek for obtaining a HELOC are listed below.
Determine how much you need
Keep in mind that a HELOC is not for everyone. Borrowers should first understand what a home equity line of credit is. MoneyGeek suggests a HELOC for financially responsible homeowners looking to fund major expenses such as investments, debt consolidation and tuition. A HELOC may not be appropriate if you need only around $1,000 for a modest home improvement project.
Assess your financial standing
In addition to estimating the amount of money you need to borrow, you should assess your financial condition. If you’re financially stable and have a steady source of income, a HELOC may be right for you. Most companies assess your credit score to determine your capacity to repay the loan. If you can improve your credit score prior to applying for a HELOC, you may be eligible for a reduced rate.
Shop around and compare lenders
Evaluating different lending institutions and analyzing their services is beneficial. This will help you find the best deals for your specific situation. With the appropriate HELOC lender, you may avoid extra charges and reap the benefits of cheap rates prior to the commencement of the loan.
Apply
Typically, you can apply for a home equity line of credit online. To save time, you should gather the necessary application information prior to applying. You may be required to provide documentation such as bank statements, mortgage statements and employment verification. MoneyGeek offers a variety of tips on how to apply for a HELOC.
Use funds wisely
After you’ve been approved for your HELOC, you should be mindful of the repayment periods and other associated fees. It’s important to keep track of the amount you pay while your HELOC is active in order to manage monthly costs.
Frequently Asked Questions About HELOCs
The procedure of establishing a HELOC can be complicated. To help you learn more about HELOCs, MoneyGeek answered some frequently asked questions.
sources
- Bank of America. "Home Equity." Accessed June 7, 2022.
- Bank of America. "Home Equity Assumptions." Accessed June 7, 2022.
- Bank of America. "Home Equity Line of Credit Application." Accessed June 7, 2022.
- U.S. Bank. "Home Equity Line of Credit (HELOC)." Accessed June 7, 2022.
- U.S. Bank. "Home Equity FAQs." Accessed June 7, 2022.
- Figure. "Homeowners, We're Here for You." Accessed June 13, 2022.
- Figure. "Figure Home Equity Line FAQs." Accessed June 13, 2022.
- PenFed. "PenFed Home Equity Line of Credit (HELOC)." Accessed June 7, 2022.
- Internal Revenue Service. "Publication 936 (2021), Home Mortgage Interest Deduction." Accessed June 7, 2022.