Best HELOC Rates and Lenders in South Dakota for 2024
Updated: December 28, 2023
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How you spend your HELOC funds depends on your financial needs. You can spend the loan on medical bills, home renovations, education costs and debt consolidation, among other things. To qualify for a HELOC, you must be a homeowner with considerable home equity.
Based on a MoneyGeek analysis, Bank of America is the best overall HELOC lender in South Dakota due to its low interest rates and discounts. However, the best lender may vary across different borrower profiles.
Comparing rates and other terms from different lenders will help you secure the best deal available in the state.
Home Equity Line of Credit (HELOC) Rates for 2024
The following table outlines various details about HELOC lenders, including their repayment terms and equity rates, as updated by MoneyGeek in May 2022.
Note that the home equity line of credit rates and other lender information keep varying, although MoneyGeek endeavors to update the table regularly to ensure borrowers find the most current data.
MoneyGeek’s Picks for Best HELOC Lenders in South Dakota
MoneyGeek cares about you, the consumer, and aims to help you secure the best home equity line of credit (HELOC) provider for your financial goals and current situation.
It’s important to note that apart from most national banks, a good number of lenders do not offer HELOC loans. If a national lender denies you a HELOC, MoneyGeek recommends that you check with your local credit union for other available options.
Best Overall HELOC Lender in South Dakota: Bank of America
Best HELOC Lender for Good Credit in South Dakota: U.S. Bank
Best HELOC Lender for Bad Credit in South Dakota: Figure
Best HELOC Lender for Competitive Rates in South Dakota: PenFed
HELOC vs. Home Equity Loans
A home equity line of credit (HELOC) is quite different from a home equity loan (HELOAN), although both offer funding for major expenses within the home.
A home equity loan is granted in a lump sum against the value of your home. It features fixed interest rates and repayment terms, and is ideal for individuals who need financing with predictable repayment terms.
A home equity line of credit works the same as a credit card. Eligible homeowners withdraw funds up to a specific limit during the draw period as stipulated in the lender’s terms. Unlike HELOANs, HELOCs have variable interests; although, some lenders allow you to convert to a fixed-rate option. The table below outlines the difference between HELOCs and HELOANs in more detail.
How to Apply for a HELOC
Getting a HELOC is very easy since most lenders carry out the entire process online. All you need is to provide the required personal information and then wait for the lender to approve your application.
Determine how much you need
Before submitting your application for a HELOC, you need to budget well and determine the exact amount you need. Home equity line of credit loans are ideal for funding large expenses such as home improvement, education and debt consolidation. A HELOC may not be the best option if you need funding for small projects.
Assess your financial standing
Apart from determining how much you need, you should evaluate your financial situation. Will you be able to repay the loan? How financially stable are you? Check whether your income level and credit score meet the requirements of your ideal lender. Most companies use these factors to rate your eligibility to repay the loan.
Shop around and compare lenders
The best way to find an option with the best terms is by comparing offerings across lenders. Check out the APR, repayment periods, credit score, income requirements and other essential features. Choosing the right lender will ensure you do not pay additional fees as you take advantage of the low rates.
Apply
Most lenders allow you to submit a HELOC application online. However, some may require you to call or visit one of their offices. To save time, ensure you have all the requisite information before starting the application process. Some lenders may ask for verified documents such as proof of income and mortgage statements.
Use funds wisely
After receiving the funds, keep track of the repayment terms and your expenses. MoneyGeek recommends limiting the funds to the intended expense to avoid falling into further debt.
Frequently Asked Questions About HELOCs
A home equity line of credit (HELOC) can help you pay for unexpected and large expenses for your home. MoneyGeek answered some frequently asked questions about HELOCs to get you started.
The best rate for a home equity line of credit varies depending on every homeowner’s financial standing. For South Dakota, PenFed Credit Union and Bank of America offer the best rates due to their six-month introductory APRs.
You can use your HELOC to pay for any significant expense, including home renovation, investment, medical bills, debt consolidation and education.
Based on the Internal Revenue Service, interest on HELOCs is often tax-deductible. For more information, you may need to talk to your financial expert.
How much one can borrow with a HELOC varies based on the lender and how best you meet the requirements. In South Dakota, Bank of America and PenFed Credit Union provide the highest limit at $1,000,000.
Whether a HELOC is better than a home equity loan depends on your financial goals. A HELOC is the best for homeowners looking for an open-ended credit line with variable interest. A HELOAN is suitable for those who need the funds as a lump sum.
In most cases, HELOCs feature variable interest rates determined by the amount you borrow. However, some lenders may allow you to change to a fixed-rate option.
sources
- Bank of America. "Home Equity Line of Credit (HELOC)." Accessed June 22, 2022.
- U.S. Bank. "Home Equity Line of Credit (HELOC)." Accessed June 22, 2022.
- Figure. "Get a Home Equity Line of Credit Fast.." Accessed June 13, 2022.
- PenFed Credit Union. "PenFed Home Equity Line of Credit (HELOC)." Accessed June 22, 2022.
- Internal Revenue Service. "Interest on Home Equity Loans Often Still Deductible Under New Law." Accessed June 22, 2022.