What’s a home equity loan good for?

A home equity loan, sometimes referred to as a home equity installment loan or HELOAN for short, may be a way to help you work towards your goals. Here’s some of the most popular uses of a home equity loan.

Home improvements

For one-time home remodel projects, a home equity loan is a great option. Not only are you improving your home, you’re reinvesting the money back into your property.

Debt consolidation

If debt management has become a burden, a home equity loan could help you consolidate your debt into a single, more manageable payment at a competitive rate.

Weddings and celebrations

A large one-time expense can be difficult to cover from savings alone. A home equity loan can be one of the most affordable ways to fund a large expense while sticking to a fixed amount.

Education

When student loans aren’t enough or an option, a home equity loan can be another solution to help you fund your or a loved one’s higher education.

How does a home equity loan work?

By using your home as collateral for your home equity loan, you’re able to borrow money at a fixed rate that’s lower than almost any other type of loan. Funds are available as a single lump sum and can have a repayment term of up to 30 years, with your paid interest potentially being tax deductible1.

How does a home equity loan differ from a home equity line of credit?

A home equity line of credit, or a HELOC, is very similar to a home equity loan as both use your home as collateral and offer competitive interest rates. The key difference is a home equity loan offers a single lump sum at a fixed rate, whereas a HELOC offers a line of credit at a variable rate that you can then draw upon.

Home equity loan rates2

  • 10-year term

  • 4.89

    %APR
  • 15-year term

  • 5.24

    %APR

Rates shown for loans in the amount of $50,000-$250,000 up to 70% LTV, and for customers with automatic payments from a U.S. Bank personal checking or savings account with a FICO score of 730 or higher2.

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