A home equity line of credit is used to fund major expenses like educational costs, medical bills, home renovations, etc. Most HELOC lenders have very specific borrower requirements, among which include equity of at least 15% to 20%, a debt-to-income ratio below 50% and an excellent credit score. To those that qualify, lines of credit are available from $5,000 to $1,000,000 with repayment terms from 5 to 30 years. Most interest rates are as low as 0.99% and as high as 18%. Some HELOC lenders charge an annual fee.
Shopping around can make a huge difference in the total amount of interest that you pay.
Home Equity Line of Credit (HELOC) Rates for 2023
When choosing the right home equity line of credit lender for you, it’s important to compare each lender’s rates and terms.
The table below shows an overview of equity rates from various home equity line of credit lenders in Kentucky, along with other pertinent information about each lender.
These are the latest rates as of May 2022. Although MoneyGeek regularly updates the information on our pages, rates and other features may change. As such, it’s always best to confirm rates and loan details with your chosen 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 | 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 | $75 | Not specified | |
Starting at 4.64% | $10,000 to $500,000 | Not specified | 10-year draw period | 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 | 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 Kentucky
MoneyGeek reviewed the top home equity line of credit lenders in Kentucky so you can choose the best one for your needs and situation.
Aside from national banks, there aren’t many lenders offering HELOC loans. Lenders that have a HELOC in their range of products offer them exclusively to borrowers with excellent credit profiles. If your application has been denied by a national lender, you can check with your local credit unions if they offer HELOC loans.
Best Overall HELOC Lender in Kentucky: Bank of America
- Bank of America
Bank of America offers borrowers additional discounts on their rates.
- 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 Kentucky: U.S. Bank
- U.S. Bank
Best for borrowers with good credit scores looking for convenient ways to apply.
- 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 Kentucky: Figure
- Figure
Figure’s low minimum credit score requirement of 620 is among the lowest of its competitors.
- 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 Kentucky: PenFed
- PenFed Credit Union
Best for borrowers who want to lock in competitive rates in advance.
- 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
Borrowers considering different loan products may come across both home equity loans (HELOANs) and home equity lines of credit (HELOCs). Though they sound very similar, the one that’s best for you will depend on your specific financial situation and needs.
HELOANs enable homeowners to borrow against their home equity. A home equity loan has a fixed interest rate and a fixed repayment term. It is distributed as a lump sum, so it’s good for borrowers that need a specific amount of cash.
Much like a credit card, a HELOC allows borrowers to borrow up to a specific amount during the draw period. This type of funding has a variable interest rate, so the amount you pay each month will vary.
We’ve included a table below that details the differences between HELOANs and HELOCs.
HELOC | Home Equity Loan | |
|---|---|---|
Interest Rate | Adjustable interest rate, | Fixed interest rate |
Monthly Payment | Changes depending on | 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
Most lending companies that offer HELOCs usually conduct the whole application process online. It can be as easy as sending your basic information and then waiting for approval. Before signing an agreement, MoneyGeek recommends that you take the following steps:
Determine how much you need
Borrowed funds can be used for a variety of purposes from debt consolidation, home renovations and educational expenses. It’s best to assess your needs for the HELOC to choose a lender that offers the credit limit ideal for your situation.
Assess your financial standing
Knowing your financial standing can help you determine whether you qualify for a HELOC. This includes checking your credit score, income and current loan-to-value ratio, among other things.
Shop around and compare lenders
As a borrower, it’s important to spend time researching your options so you can find the best rates and loan terms for your situation. Locking in a low APR rate upfront can help you save on money.
Apply
Most HELOC applications can be easily completed online. To save time, you may even want to gather verified documents, like bank statements, mortgage statements and proof of income, beforehand.
Use funds wisely
A HELOC must eventually be repaid, so it’s important that you spend your funds wisely. The smartest way to use HELOC funds is for long-term investments. Remember, borrowing funds from a HELOC could put your home at risk, so you should carefully consider your expenses and make timely payments.
Frequently Asked Questions About HELOCs
It can be overwhelming to open a home equity line of credit (HELOC) for the first time. MoneyGeek answered some frequently asked questions about HELOCs to guide you in the process.
sources
- Bank of America. "Home Equity Line of Credit." Accessed June 7, 2022.
- U.S. Bank. "Home Equity Line of Credit." Accessed June 7, 2022.
- Figure. "Home Equity Line of Credit." Accessed June 13, 2022.
- PenFed. "Home Equity Line of Credit." Accessed June 7, 2022.
- Internal Revenue Service. "Publication 936 (2021), Home Mortgage Interest Deduction." Accessed June 7, 2022.