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.

Not sure what your home improvement project could cost?
 
 

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

  • 3.80

    %APR

  • 15-year term

  • 3.80

    %APR

Rates shown for loans in the amount of $50,000-$99,999 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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