Best HELOC Rates and Lenders in Kentucky for 2024

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Edited byMorgan Hull

Updated: December 28, 2023

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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.

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Home Equity Line of Credit (HELOC) Rates for 2024

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.

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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

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

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Best HELOC Lender for Bad Credit in Kentucky: Figure

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Best HELOC Lender for Competitive Rates in Kentucky: PenFed

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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.

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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:

1

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.

2

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.

3

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.

4

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.

5

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.

When calculating HELOC rates, lenders look at your credit profile. In Kentucky, Bank of America and PenFed Credit Union offer introductory APRs of 1.99% and 0.99%, respectively, for the first six billing cycles.

Borrowers can use a HELOC loan for virtually anything. This includes home renovations and upgrades, debt consolidation, credit card debt, mortgage payments, college tuition, etc.

According to the IRS, a HELOC is only tax-deductible when you use your funds to buy, build or substantially enhance your house. It’s best to ask your lender or financial advisor about interest deductions and other information.

In Kentucky, U.S. Bank lends amounts as low as $5,000, while PenFed Credit Union and Bank of America offer loan amounts as high as $1,000,000 to qualified borrowers. The amount you qualify for, however, will depend on your credit profile.

HELOCs and HELOANs have different terms and conditions. If you want to have funds available in case of an emergency, a HELOC allows you to withdraw money at any time. Repayment starts after a certain period. A HELOAN, on the other hand, is a better option if you need a large amount of money upfront and are willing to make the monthly payments immediately after your loan is disbursed.

Because HELOCs have revolving lines of credit, they come with a variable APR. However, some lenders may allow you to convert all or some of the loaned amount to a fixed interest rate loan.

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