Best HELOC and Home Equity Lenders in California

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If you’re a homeowner in California and want to tap into your home equity, you’re in luck. According to the California Association of Realtors, some areas in the Golden State have seen a nearly 10% increase in home values over the past year, giving homeowners more equity they can turn into cash. 

Your home equity is the difference between what your home is worth and the outstanding balance on your mortgage. A home equity loan or home equity line of credit (HELOC) lets you borrow against the equity in your house to get quick cash that you can use for almost any purpose, from home improvements to debt consolidation. The more equity you have, the larger the loan you can qualify for. 

There are plenty of home equity loan and HELOC lenders in California, but choosing the right one can be a challenge. There’s a lot more to consider than just the interest rates and fees — everything from the loan term to how the monthly payments are structured can affect your borrowing experience and the loan’s long-term cost.

To make the process easier, we’ve done the research for you and compiled a list of the best HELOC and home equity loan lenders in California. Here’s what you need to know about each lender, and what you should look for when choosing the right lender for you. 

Editorial Independence

As with all of our home equity loan and home equity line of credit (HELOC) lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.

Best National Home Equity Line of Credit (HELOC) and Home Equity Loan Lenders in California

Good for wide nationwide availability
U.S. Bank
U.S. Bank
Good for wide nationwide availability
U.S. Bank
  • Products offered:
    Home equity loan, HELOC, rate-lock HELOC
  • Home equity loan terms:
    Up to 30 years
  • HELOC terms:
    10-year draw period, unspecified repayment period
  • Maximum LTV allowed:
    80%

NextAdvisor’s Take

Pros
  • Rate discount for setting up autopay from a U.S. Bank checking or savings account (home equity loans only)
  • Extensive availability nationwide (47 states for both home equity loans and HELOCs)
  • Can apply online, over the phone, or in person at a branch
  • Good price transparency
  • Many customer support options
Cons
  • There may be an annual fee for HELOCs if you don’t have a U.S. Bank Platinum Checking Package
  • Not available in TX, DE, SC
  • Potential early closure fee if you close your HELOC within 30 months of opening
The Bottom Line

Based in Minneapolis, Minnesota, U.S. Bank is the fifth largest banking institution in the U.S. It offers both home equity loans and HELOCs in 47 states, with the option of interest-only HELOCs  available to qualified borrowers. You also have the option to lock all or part of your outstanding HELOC balance into a fix-rate option during your draw period. Available loan amounts for HELOCs and home equity loans range from $15,000 to $750,000, and up to $1 million for properties in California.

There are no closing costs on home equity loans or HELOCs from U.S. Bank, but you’ll be charged an early closure fee of 1% of the line amount ($500 max) if you close your HELOC within 30 months of opening. In addition, HELOC borrowers may be charged an annual fee of up to $90, which can be waived with a U.S. Bank Platinum Checking Package. U.S. Bank offers a rate discount of 0.5% for home equity loan borrowers who set up automatic payments from a U.S. Bank personal checking or savings account.

You can apply for a home equity loan or HELOC through an online application, by phone, or by visiting a U.S. Bank branch in person. If you want a loan estimate for a home equity loan — which includes the estimated interest rate, monthly payment, and total closing costs — without completing a full application, you can get one by speaking with a banker over the phone. 

We like U.S. Bank because of its extensive nationwide availability, many customer support options, and excellent price transparency — meaning you can get a personalized rate quote and fee information just by filling out some basic information, no credit check required. 

Good for wide range of customer service options
Connexus Credit Union
Connexus Credit Union
Good for wide range of customer service options
Connexus Credit Union
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC
  • Home equity loan terms:
    5 to 15 years
  • HELOC terms:
    15-year draw period, 15-year repayment period
  • Maximum LTV:
    90% for home equity loans

NextAdvisor’s Take

Pros
  • No annual fee
  • Available in 46 states
  • Excellent customer service options
  • Membership requirements are relatively easy to meet
Cons
  • Credit check required to get a personalized rate quote and product terms
  • Not available in Alaska, Hawaii, Maryland, and Texas
  • Potential for high closing costs
  • Must be a member of the credit union to get a loan
The Bottom Line

With over 420,000 members in all 50 states, Connexus Credit Union has a far reach in the United States. The credit union offers home equity loans and HELOCs in 46 states (excluding Alaska, Hawaii, Maryland, and Texas). Loan amounts for home equity loans and HELOCs range from $5,000 to $200,000. Within its HELOC product offerings is an interest-only HELOC which may allow you to pay a lower monthly payment. Since Connexus is a credit union, its products are only available to members. But, membership eligibility is open to most people: you (or a family member) just need to be a member of one of Connexus’s partner groups, reside in one of the communities or counties on Connexus’s list, or become a member of the Connexus Association with a $5 donation to Connexus’s partner nonprofit. 

Connexus does not specify any rate discounts, but it does offer an introductory rate for the first six months of your loan term. You won’t have to pay an annual fee for a home equity loan or HELOC with Connexus, but closing costs can range from $175 to $2,000 depending on your loan terms and property location. 

To apply for a home equity loan or HELOC with Connexus, you can fill out a 3-step application online. Though the application process is quick, you won’t be able to see a personalized rate or product terms without a credit check.

Connexus offers expansive nationwide availability and has several product offerings, part of the reason this lender ranked highly for us. Its straightforward application process is another bonus that makes applying for a home equity loan or HELOC easy.

Good for online application user experience
Spring EQ
Spring EQ
Good for online application user experience
Spring EQ
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC
  • Home equity loan terms:
    5 to 30 years
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    90% for home equity loans, 97.5% for HELOCs

NextAdvisor’s Take

Pros
  • No credit check required to see personalized rates
  • Available in 38 states
Cons
  • Origination fee of $995
  • Minimum credit score of 620 required
  • No specified rate discounts
The Bottom Line

Spring EQ may be a relatively new bank founded in 2016, but it has already earned a positive reputation from customers across the 38 states it serves. Spring EQ offers home equity loans, HELOCs, and interest-only HELOCs, providing borrowers with flexible loan options. Home equity loan amounts range from $5,000 to $500,000, while HELOC line amounts range from $50,000 to $500,000.

Spring EQ loans may be subject to an origination fee of $995 and an annual fee of $99 in some states. Spring EQ does not specify any rate discounts.

The Spring EQ loan application process is transparent and easy to understand. Customers can see an extensive breakdown of their loan term and rate options without needing to undergo a credit check or provide their social security number. To be eligible for a home equity loan or HELOC with Spring EQ, you’ll need a credit score of 620 or higher, along with a debt-to-income ratio of 45% or less.

We ranked Spring EQ highly because of the lender’s price transparency, which allows potential borrowers to get pre-qualified for a loan with only basic information. This makes it easy to compare rates without needing to provide sensitive personal information or undergo a hard credit check. Additionally, the online experience is user-friendly and the application’s breakdown of rates, fees, and terms is easily digestible for customers.

Good for rate match guarantee
Third Federal Savings & Loan
Third Federal Savings & Loan
Good for rate match guarantee
Third Federal Savings & Loan
  • Products offered:
    Home equity loan, 5/1 home equity loan, HELOC
  • Home equity loan terms:
    5 year, 10 year, 5/1 adjustable rate (6-30 years)
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    80%

NextAdvisor’s Take

Pros
  • No application, closing, or origination fees
  • Lowest rate guarantee
  • Smooth online application process
Cons
  • Limited geographic availability for home equity loans
  • $65 annual fee on HELOCs (waived the first year)
The Bottom Line

Opened in the midst of the Great Depression in 1938, Third Federal Savings & Loan sought to help unemployed and underemployed Ohio residents achieve home ownership. Since its opening, Third Federal has expanded significantly, now offering HELOCs in 26 states and home equity loans in eight states. Home equity loans and HELOCs are available in amounts from $10,000 to $200,000.

Home equity loans and HELOCs with Third Federal come with an annual fee of $65 (waived the first year) but no application fees, closing fees, or origination fees. If you set up autopay from an existing Third Federal account before closing, you’ll be eligible for a 0.25% rate discount. Additionally, Third Federal offers a lowest rate guarantee on its HELOCs and home equity loans, meaning Third Federal will offer you the lowest interest rate relative to other similar lenders or pay you $1,000.

You can apply for a home equity loan or HELOC on the Third Federal website. Both applications are included on the same page along with multiple rate and term options, allowing the customer to assess what will be best for them. Third Federal also provides helpful tools and tips on its application page to answer questions that borrowers may have. You won’t have to register an account to apply, but you’ll still be able to save your application and return to it later.

We like Third Federal’s application process and the lender’s price transparency. If you’re not sure what kind of home equity product you’re looking for, the website provides useful information to help you decide. Third Federal also offers a unique product not commonly found among other lenders: a 5/1 adjustable-rate home equity loan, where the rate is fixed for the first five year and then adjusts annually, much like how an adjustable-rate mortgage works. However, you won’t be eligible for this product unless you live in one of the eight states in which Third Federal offers home equity loans.

Good for HELOCs with longer repayment periods
PNC Bank
PNC Bank
Good for HELOCs with longer repayment periods
PNC Bank
  • Products offered:
    HELOC, rate-lock HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    10-year draw period, 30-year repayment period
  • Maximum LTV:
    89.90%

NextAdvisor’s Take

Pros
  • Variable and fixed-rate HELOC options
  • 30-year repayment period on HELOC
  • Option to choose a custom loan term
  • User-friendly website
Cons
  • Don’t offer home equity loans
  • $50 annual fee on HELOCs
The Bottom Line

PNC Bank is the sixth-largest bank in the U.S. by consolidated assets, according to the Federal Reserve. Headquartered in Pittsburgh, PA, PNC serves 44 states. Though the bank does not offer home equity loans, it offers both variable-rate HELOCs and fixed-rate HELOCs. You can even switch between variable and fixed-rate interest over the course of your draw period. Another benefit of a PNC HELOC is that the repayment period is 30 years, unlike most other lenders who have 20 year terms. A longer payment period generally means lower monthly payments (but more interest paid in the long run), which can be beneficial to those who want to borrow large amounts. Line amounts from $10,000 to $1,000,000 are available on a PNC HELOC.

PNC offers a 0.25% interest rate discount to borrowers who set up and maintain automatic payments from a qualifying PNC checking account. There is a $50 annual fee for HELOC borrowers, except in Texas. 

The PNC website is user-friendly, giving customers the ability to estimate their home equity with an easy-to-use calculator. It also provides several useful graphics and videos to help borrowers better understand how their HELOCs work. PNC allows potential borrowers to see their rate and term options early on in the application process, indicating good price transparency. PNC also gives customers the option to choose a custom loan term. 

We like PNC Bank because its application is straightforward and the bank is very transparent about its rates, fees, and terms without requiring a credit check. Though PNC doesn’t don’t offer home equity loans at all, its wide nationwide availability for HELOCs is noteworthy.

Good for high loan-to-value ratio options
BMO Harris Bank
BMO Harris Bank
Good for high loan-to-value ratio options
BMO Harris Bank
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC, rate-lock HELOC
  • Home equity loan terms:
    5 to 20 years
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    85% for HELOCs; 89.99% for most home equity loans

NextAdvisor’s Take

Pros
  • Available in 48 states
  • No hard credit check required
  • Flexible product offerings
  • Option for 100% CLTV for borrowers who meet certain qualifications
Cons
  • Limited customer service options
  • Can only receive personalized rates on the phone
  • $75 annual fee for HELOCs
The Bottom Line

As the 8th largest bank by assets in North America, BMO Harris Bank (a subsidiary of the Canadian financial services company Bank of Montreal) serves more than 12 million customers globally.  Currently, BMO Harris products and services are available in 48 states (all but New York and Texas). BMO Harris offers home equity loans and three variations of a HELOC. Loan amounts for home equity loans start at $5,000 and up while HELOC lines start at $10,000 and up. 

The normal maximum combined loan-to-value ratio allowed is 85% for HELOCs and 89.99% for home equity loans, but a 100% max CLTV option is available for low-to-moderate income borrowers or Low to Moderate Income Census Tract customers who need to make home improvements.

There is no application fee for a home equity loan or line of credit with BMO Harris. In addition, BMO Harris will pay closing costs for loans secured by an owner-occupied 1 to 4-family residence, but borrowers will have to pay a $75 annual fee for a HELOC. If you authorize auto pay from a BMO Harris checking account, you’ll be eligible to receive a 0.50% rate discount.

You can apply for a home equity loan or HELOC online or in-person, but in order to get personalized rates, you’ll have to speak with a representative on the phone. Getting personalized rates does not require a hard credit check. 

We like that BMO Harris offers both home equity loans and three types of HELOCs almost nationwide, but the lender fell short because of its low price transparency. Additionally, the online application requires your social security number and has some elements that could be confusing for customers. 

Good for 24-hour customer support
Flagstar Bank
Flagstar Bank
Good for 24-hour customer support
Flagstar Bank
  • Products offered:
    Home equity loan (in some areas), HELOC, interest-only HELOC
  • Home equity loan terms:
    10, 15, or 20 years
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    80%

NextAdvisor’s Take

Pros
  • Available in 49 states
  • Accessible customer service, including 24-hour phone support
  • Flexible product offerings
Cons
  • No online application (can only request a phone call)
  • Unable to get personalized rate quote through website
The Bottom Line

Flagstar Bank has the highest nationwide availability yet, offering home equity loans and HELOCs in 49 states (all but Texas). Though both products are offered in 49 states, the availability of home equity loans may be limited depending on your area. Available loan amounts for home equity loans and HELOCs are $10,000 to $1,000,000.

HELOCs with Flagstar require a $75 annual fee, but it is waived the first year. To avoid closing fees, you’ll have to keep your HELOC open for at least 36 months. Additionally, there is a 0.50% rate discount for borrowers who have monthly automatic payments set up from a Flagstar Bank deposit account.

Flagstar doesn’t have a full online application, only a form where you can submit your information to be contacted by a representative later.  Flagstar does not provide rates on its website, you can get a custom rate based on a soft credit check and some additional information. 

While its nationwide availability for HELOCs is strong, Flagstar’s tedious application process and lack of transparency may be frustrating for customers seeking a quick, easy process. The lender does offer several customer service options, including 24-hour loan support via phone, so this may be appealing to those who enjoy accessible communication with customer service. 

Good for no fees or closing costs
Discover
Discover
Good for no fees or closing costs
Discover
  • Products offered:
    Home equity loan
  • Home equity loan terms:
    10, 15, 20 or 30 years
  • HELOC terms:
    N/A
  • Maximum LTV:
    Not specified

NextAdvisor’s Take

Pros
  • No origination fees or closing costs
  • Home equity loans are available in 48 states
Cons
  • Limited customer service options available
  • Home equity loans not available in Iowa and Maryland
  • Does not offer HELOCs
The Bottom Line

A financial services company known primarily for its credit cards, Discover also offers home equity loans as part of its suite of banking products. Home equity loans are available in 48 states, but the lender does not offer home equity lines of credit (HELOCs) at all. For Discover’s home equity loans, possible loan amounts range from $35,000 to $300,000. The lender charges no origination fees, application fees, appraisal fees, and mortgage taxes. 

You can apply for a home equity loan from Discover online or over the phone. The application process takes approximately six to eight weeks in total, according to Discover’s website. 

Discover offers wide nationwide availability for its home equity loans and good price transparency, but its lack of HELOC offerings may be a limiting factor for consumers looking for additional product options. In addition, Discover offers limited customer service options — your only option to get help is by phone, with no in-person service or online options like email or live chat. 

Good for unique product offering
Figure
Figure
Good for unique product offering
Figure
  • Products offered:
    Non-traditional HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    5, 10, 15, or 30 years
  • Maximum LTV:
    95%

NextAdvisor’s Take

Pros
  • Wide nationwide availability
  • Good online user experience
  • 0.75% discount for qualifying customers
  • Flexibility of a home equity loan/HELOC hybrid
Cons
  • Only one product offered
  • Limited price transparency
  • Potentially high origination fee
The Bottom Line

At only three years old, Figure uses a unique combination of technology and banking to provide customers in 41 states with HELOCs. Though officially called a home equity line of credit, Figure’s HELOC product has characteristics of both a traditional HELOC and a home equity loan. Borrowers will withdraw the full line amount (minus the origination fee) at the time of origination. Once they repay the initial balance at a fixed rate, they will be able to make additional draws over a specified draw period. Available line amounts range from $15,000 to $400,000.

A HELOC with Figure has no closing costs, but the borrower will be responsible for an origination fee of up to 4.99% of the initial draw, depending on the state the property is located in and the borrower’s credit profile. You may also have to pay a recording fee if your county requires it. Borrowers may receive a rate discount of up to 0.75%; 0.50% for opting into a credit union membership and 0.25% for enrolling in autopay. 

You can apply for a Figure HELOC 100% online, in only a few minutes, according to the website. You’ll be prompted to fill out some basic personal information, but you may have to wait for your application to be reviewed before you can continue with the application process.

Figure’s main draws are its fast funding — it advertises funding in as few as 5 days — and easy-to-navigate website with an accompanying chatbot. However, its downsides include the fact that you can only fill out the first part of the application before you’re told you must wait for your information to be reviewed before you can continue. In addition, Figure only offers a single product which might not be right for everyone. If you don’t want a unique HELOC/home equity loan hybrid and want to go with a traditional HELOC or home equity loan, you’ll need to find another lender. 

Good for borrowers outside the continental U.S.
PenFed Credit Union
PenFed Credit Union
Good for borrowers outside the continental U.S.
PenFed Credit Union
  • Products offered:
    HELOC, interest-only HELOC, rate-lock HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    90%

NextAdvisor’s Take

Pros
  • Offered in all 50 states as well as Guam, Puerto Rico, and Okinawa
  • Flexible HELOC product offerings
  • Credit union membership easy to obtain
Cons
  • No online application
  • Poor price transparency
  • Does not offer home equity loans
The Bottom Line

Established in 1935, Pentagon Federal Credit Union (widely known as PenFed) offers HELOCs in all 50 states as well as Guam, Puerto Rico, and Okinawa. PenFed is a credit union so its products are only available to members, but you can easily become a member by opening a PenFed savings account and funding it with at least $5. With PenFed, you’ll have the flexibility to choose between a standard, interest only, or rate lock HELOC with line amounts ranging from $25,000 to $1,000,000. But, the lender does not offer home equity loans at all.  

HELOCs with PenFed will have an annual fee of $99 unless you have paid $99 in interest during the preceding year. PenFed will pay most closing costs, but for credit lines greater than $500,000, the borrower will likely be responsible for closing costs. No rate discounts are specified. 

If you’re interested in applying for a HELOC with PenFed, you’ll have to request a callback over the phone or online. This feature may be a major drawback for customers who prefer online services and applications.

While PenFed may be a good option for borrowers in U.S. territories who don’t have many other alternatives when it comes to home equity lenders, the lender’s lack of an online application and lack of price transparency earned it a low score in our ratings. If you prefer communication via telephone, however, PenFed may be a good option for you.

How We Chose These Lenders

Our Methodology

NextAdvisor developed a framework to evaluate home equity lenders using a weighted average score between 1 and 5 based on the following criteria. A higher weight was given to the criteria we determined to be most important:

  1. Nationwide availability: We rated lenders on a scale of 1 to 5 based on how many states their home equity products were offered in. For lenders that only offered either home equity loans or HELOCs, we looked at how many states offered that specific product. For lenders that offered both home equity loans and HELOCs, we looked at how many states each individual product was offered in, and then took the average. A lender scored a 5 if it offered home equity products in at least 45 states which equates to 90% of U.S. states. Nationwide availability counted for 10% of the composite score. We eliminated any lender from this list that does not offer a home equity product in California.
  2. Online user experience: We rated lenders on a scale of 1 to 5 based on the user experience of their online application process. A 5 was given to lenders who had a clear, easy-to-navigate online application process with no technical issues or confusing instructions. A score of 1 was given to lenders who did not offer an online application at all, instead requiring customers to apply in person at a branch or over the phone. Online user experience counted for 20% of the composite score.
  3. Products offered: We rated lenders on a scale of 1 to 5 based on how many types of home equity products they offered. Product offerings were categorized into the following types: home equity loans; standard variable-rate, interest-and-principal HELOCs, interest-only HELOCs, HELOCs with fixed-rate or rate-lock options, and miscellaneous products that did not fall into any of the previous categories. Lenders who offered at least 4 types of products received a 5. Products offered counted for 20% of the composite score.
  4. Price transparency: We rated lenders on a scale of 1 to 5 based on their price transparency, which we defined as how much information you could get about rates and fees without a hard credit check. Comparing rates and fees from multiple lenders is one of the best ways to ensure you’re getting the best deal, and we gave high scores to lenders who made it easy to do so. On the other hand, lenders who kept detailed rate and fee information behind a hard credit check — which can slightly lower your credit score and should only be done when you’re serious about moving forward with a particular lender — scored lower. Lenders who provided personalized quotes for rates, fees, and important loan information with only basic information (and no hard credit check) required received a 5. Price transparency counted for 30% of the composite score.
  5. Customer service options: We rated lenders on a scale of 1 to 5 based on how many different customer service options were available to consumers needing help with their loan application or loan servicing. Examples of customer service options we counted included, but were not limited to, online live chat, phone, email, visiting an in-person branch, in-person or virtual appointments with dedicated loan officers, and social media direct messaging. Lenders who had five or more customer service options received a 5. For each option that was available only to existing customers (and thus would not be available to new customers needing help with the application process), we deducted 0.5 from the score. For any lender that had a 24/7 customer service option, regardless of what form that option took, we added 1 to the score. We did not evaluate the quality of the customer service itself, as that can be subjective and highly dependent on the specific customer service representative a borrower is working with. Customer service options counted for 20% of the composite score.

Local California Home Equity Line of Credit (HELOC) and Home Equity Loan Lenders 

First Republic Bank

First Republic Bank was founded in San Francisco in 1985. Although it began as one of the smallest banks in the U.S, it eventually grew to be the 14th largest bank by 2020. Today, First Republic has over 85 locations. The bank’s branches are concentrated in California, although you can find branches in a handful of other states.

First Republic offers a variety of products for individual consumers and businesses. Among its personal financial product offerings are deposit accounts, personal loans, mortgages and refinancing (including cash-out refinancing), and home equity lines of credit (HELOCs). The bank does not offer home equity loans. 

First Republic advertises a no-closing cost HELOC which carries no additional closing costs if closed simultaneously with a First Republic mortgage. This HELOC is an interest-only HELOC, meaning borrowers can choose to make interest-only payments during the draw period, followed by principal-and-interest payments during the repayment period. To apply for a HELOC, borrowers can call or visit a local branch. 

Logix Federal Credit Union

Founded in 1937, Logix Federal Credit Union is a credit union with 18 branches across California. Unlike banks, credit unions operate as not-for-profit entities owned by their members. For this reason, they’re often able to provide competitive rates and fees, while still offering many of the same products and services you would find at a bank. However, you typically need to meet certain eligibility criteria to join a credit union. 

Fortunately, Logix’s membership requirements are quite flexible, so nearly everyone should be able to qualify for membership. Once you’ve joined, you’ll have access to the credit union’s full range of offerings, including credit cards, deposit accounts, personal loans, mortgages and refinancing (including cash-out refinancing), home equity loans, and HELOCs.

Logix’s home equity loans and HELOCs come with no closing costs or annual fees, and you can borrow up to 80% of your combined loan-to-value (in other words, Logix allows a maximum loan-to-value ratio of 80%). Its HELOCs allow for interest-only payments if you so choose, but know that doing so may result in a large balloon payment at the end of the repayment period. Applications can be submitted online, over the phone, or by visiting a local branch. 

How to Find the Best HELOC or Home Equity Loan Rate in California 

The first and most important step in finding the best home equity loan or HELOC rate in California is to compare offers from multiple lenders. Make sure you’re looking at both the rate and fees (if there are any) so you’re comparing apples to apples.

But to find the best value for your individual situation, you should also consider how you intend to use and repay the funds. For instance, if you’re borrowing a small amount with the goal of paying it back quickly, then a lender that offers a low introductory rate could be the best fit for you, as your loan will be paid off by the time the introductory period ends and the rate increases. Or, you may want to choose a lender with a slightly higher rate in exchange for no fees or closing costs. 

Here are a few other steps to consider when searching for the best loan for you. 

Rate and Fee Transparency

Not all lenders provide the same amount of information on their websites. Some will provide detailed information, such as different rate and fee combinations, along with qualification requirements and disclosures. Other lenders may require you to complete a loan application and agree to a hard credit pull before providing any information. A hard credit pull can cause a slight dip in your credit score, so you should only consent to a hard pull if you’re serious about applying for a particular loan. 

If you’re trying to compare lenders, keep in mind that the lowest advertised rates may require you to have a certain credit score or meet other criteria, such as having a checking account with the bank originating your loan. A lower rate may also come at the expense of additional fees and closing costs. Using a loan calculator during the comparison process can help you figure out which loan will save you the most money in the long run. Also look at reviews of each lender to get an idea of what you might expect. 

Products and Terms Offered 

While home equity loans and home equity lines of credit (HELOCs) have a lot of similarities, there are some notable differences. A home equity loan typically has a fixed interest rate and fixed monthly payments. The loan amount is disbursed in a lump sum when you take out the loan. A HELOC has a variable interest rate, but allows you the flexibility to draw funds as needed over a certain time frame. Some lenders offer HELOCs that let you lock some or all of your outstanding balance at a fixed rate. 

You should consider whether a HELOC or home equity loan is best suited to your needs, as not all lenders offer both types of loans. Also pay attention to the loan terms, as some lenders’ offerings may deviate from the traditional home equity loan or HELOC structure. 

Shop for Multiple Lenders

Just like with mortgages, it’s a good idea to comparison shop with multiple home equity lenders before coming to a final decision. Lenders can change their rates throughout the year, so a lender that may not have been competitive earlier in the year could now be offering a much better deal. 

In addition to the interest rate and closing costs, it’s also important to consider the structure of the home equity loan or HELOC. Annual fees, prepayment penalties, whether payments are interest-only, and when funds can be accessed, are some factors that can impact how useful the loan is for your specific scenario. 

Only Borrow What You Need and Can Afford

Before you sign on the dotted line for a loan, make sure you can afford the monthly payments. In contrast to an unsecured personal loan, defaulting on a home equity loan or HELOC is especially risky because the loan is secured by your house, meaning the lender could foreclose on your home if you can’t make payments. 

When you apply for a loan, lenders will look at your annual income, total debts, and debt-to-income ratio to make sure you can afford the monthly payments before they grant you the loan. However, you should not use your lender’s approval as the sole indication that you can afford the loan. It’s a good idea to list out all your monthly expenses and income to make sure the loan payments fit comfortably within your budget. 

Also make sure you have a plan for how you’re going to use the loan funds and you don’t borrow more than what you need. Borrowing too much will cost you more in interest over the loan term, and raises the risk of you being unable to repay the loan later on. 

Improve Your Credit Score

When evaluating a loan application, lenders will look at your credit score, as it tells the lender how likely you are to miss a payment or default on your debts. The higher your score, the less likely you are to miss a payment, and the lower rate you’ll be able to get. Most lenders will have minimum credit score requirements you must meet in order to qualify for a loan at all.

Your credit score consists of five main factors: your payment history, your credit utilization ratio and how much you owe on all your outstanding debts, how long you’ve had credit, the mix of your credit accounts, and how recently and how often you’ve been applying for credit. While some things can take time to improve, here are a few things you can do to give your score a quick boost:

  • Keep your credit balances below 30% of your maximum credit limit
  • Don’t apply for too many new loans, lines of credit, or credit cards in a short period of time
  • Always pay your bills on time and in full, if possible 

How to Get a HELOC or Home Equity Loan in California

The steps involved in getting a HELOC or home equity loan for a property in California can vary depending on the lender. However, the basic process and requirements are the same for most lenders. If you’re interested in getting a HELOC or home equity loan, here are the steps you can expect to encounter:

  1. Research, compare offers, and choose a lender that offers the product you need at a favorable price.
  2. Submit an application with the lender. 
  3. Sign preliminary disclosures.
  4. Provide any requested documentation to the lender.
  5. Order and schedule any required home inspections or home appraisals.
  6. Provide any additional documentation requested by the lender’s underwriting department for full approval.
  7. Upon receiving a full approval and clear to close from the lender, schedule a notary to sign final loan documents.
  8. Once final loan documents are signed and reviewed by the lender, funds are disbursed and typically available for use within 24 hours.