Owning a home can provide more than just a place to live. It may also give homeowners access to financing through the equity they have built over time.
A home equity loan allows eligible homeowners to borrow money using the equity in their property as collateral. This financing option can be useful for major home renovations, debt consolidation, medical expenses and other significant financial needs.
For homeowners in the United States, several banks and digital lending platforms offer home equity loans with different interest rates, repayment periods and application requirements.
This guide explains how home equity loans work, which lenders to consider and how to find competitive interest rates.
What Is a Home Equity Loan?
A home equity loan is a type of secured loan that allows homeowners to borrow against the value of their property.
Home equity is the difference between your home’s current market value and the outstanding balance on your mortgage.
For example, if your home is worth $400,000 and you owe $250,000 on your mortgage, your estimated home equity is $150,000.
A lender may allow you to borrow a portion of that equity, depending on your credit profile, income and property value.
Unlike a home equity line of credit (HELOC), which generally provides revolving access to funds, a traditional home equity loan usually provides a lump sum with a fixed repayment schedule.
Best Home Equity Loan Apps and Online Lending Platforms
Several digital lenders allow homeowners to check rates, submit applications and manage their borrowing online.
1. Figure
Figure
Figure provides online home equity lines of credit (HELOCs).
Key features:
- Online application.
- Loan amounts from $15,000 to $750,000.
- Fast digital preapproval.
- Funding may be available in as few as five days.
Website: Visit Figure
Figure is worth considering for homeowners who prefer a digital application process. Its HELOC structure requires the initial credit line to be drawn at closing, so review the fees carefully. Apply Online in Minutes+1
2. SoFi
SoFi Logo PNG, Vector (AI, EPS, CDR, PDF, SVG) – iconLogoVector
SoFi
SoFi offers home equity financing options for eligible homeowners.
Key features:
- Digital application.
- Home equity financing.
- Personal finance management tools.
- Online rate checking.
Website: Visit SoFi
3. Aven
Aven: $142 Million In Series D Raised To Offer Consumer Credit Cards Backed By Home Equity
Aven
Aven offers home equity financing products, including a home equity line of credit and a home equity-secured credit card.
Key features:
- Online application.
- Home equity-based borrowing.
- Fixed-rate HELOC option.
- Digital account management.
Website: Visit Aven
4. Achieve
Achieve HELOC Review 2026 – NerdWallet
Achieve
Achieve offers home equity financing options for qualifying homeowners.
Key features:
- Online application process.
- Home equity loans and credit lines.
- Debt consolidation financing.
- Options for different credit profiles.
Website: Visit Achieve
These lenders have different state coverage, loan structures and qualification requirements. Bankrate+1
How to Qualify for a Home Equity Loan
Most lenders consider several factors before approving a home equity loan.
Common requirements include:
- A qualifying credit score.
- Sufficient equity in your property.
- Proof of regular income.
- A manageable debt-to-income ratio.
- Property ownership documents.
- Home valuation and mortgage information.
Some lenders require homeowners to maintain at least 15% to 20% equity after borrowing, although requirements vary.
How to Get the Lowest Home Equity Loan Interest Rates
If you want an affordable home equity loan, consider these strategies:
- Improve your credit score before applying.
- Pay down existing debts.
- Compare offers from multiple lenders.
- Choose a repayment period that suits your income.
- Compare APR rather than advertised interest rates alone.
- Check origination and closing costs.
- Consider whether a fixed-rate loan is better for your financial situation.
Home Equity Loan vs HELOC: Which Is Better?
| Feature | Home equity loan | HELOC |
|---|---|---|
| Funding | Lump sum | Revolving credit |
| Interest | Usually fixed | Often variable |
| Repayment | Fixed schedule | Draw and repayment periods |
| Best for | One major expense | Ongoing expenses |
A home equity loan may be better when you know exactly how much money you need. A HELOC may be more suitable when you expect several expenses over time.
Risks of Borrowing Against Your Home
Home equity financing is secured by your property. If you fail to repay the loan, the lender may eventually pursue foreclosure.
Other risks include closing costs, rising variable interest rates and borrowing more than you can comfortably repay.
Never use your home equity without carefully considering the long-term financial consequences.
Final Thoughts
Home equity loans can help homeowners access funds for renovations, debt consolidation and other major expenses.
Digital lending platforms such as Figure, SoFi, Aven and Achieve make it possible to explore different home equity financing options online.
Before applying, compare interest rates, fees, repayment terms and eligibility requirements. Most importantly, remember that your home serves as collateral, making responsible borrowing essential.