Where to get a home equity loan or HELOC: finding the best lender

Where to get a home equity loan or HELOC: finding the best lender
Rae Hartley Beck
8 min read
Key takeaways
Home equity loans can be obtained from various lenders such as banks, credit unions, mortgage lenders and online-only lenders.
The best home equity lender for you is likely the one that offers you the best competitive rates and loan terms or one you already have a strong relationship with.
It is important to compare rates and fees from different lenders and different types of lenders to find the best deal in a home equity loan.
Traditionally, if you wanted to borrow against your home, you went to your friendly local bank or savings and loan association. Now, there are several other types of institutions that provide home equity loans and lines of credit (HELOCs). You might be a bit overwhelmed sorting through them all and knowing where to start. Here we’ll break down all your available options and how to determine which is the best for you.
What are home equity loans?
Your home equity is basically the difference between what your home is currently worth and what you still owe on your mortgage (calculating it isn’t hard). That equity is an asset, one you can borrow against. There are two primary products that use your home equity as collateral: a HELOC, a type of credit line with a variable interest rate — not unlike a credit card — and a home equity loan, essentially a second mortgage with a fixed rate.
Where to get a home equity loan or HELOC
Most lenders in the mortgage business provide home equity financing, but not all products may be available in all states (especially when it comes to HELOCs). Conversely, there are some firms that specialize in home equity loans and HELOCs, but don’t provide purchase mortgages. Doing research beforehand is key.
1. Banks
Many multi-state retail banks like Bank of America, Citizens Bank and PNC Bank feature home equity-related financing. In fact, these large depositories tend to be among the largest home equity lenders and offer the largest HELOC credit lines. You might especially benefit from choosing this option if you already have an account or do business there.
Advantages of applying for a home equity loan from a bank
They often offer discounted rates or suspend fees when the borrower is a current customer. They also offer some of the best special introductory HELOC rates — for a finite period.
They offer a variety of services and products, which can lead to convenience and savings, such as making the monthly loan payment from an in-house checking account, etc.
You can visit a physical branch to apply or meet with a loan officer to discuss your funding needs.
2. Credit unions/savings and loan associations
Credit unions, along with banks, originated more than 90% of HELOCs in Q2 2025, according to credit bureau TransUnion. Credit unions also tend to offer the biggest home equity loan amounts.
Though some are publicly traded companies, most credit unions are private, not-for-profit financial institutions with a cooperative structure: They are owned by their “members.” Originally, these members were aligned by factors like location, profession/industry or employment by a particular company. Nowadays, though, many operate on a regional or national level, basically opening up membership to anyone.
Credit unions and S&Ls that offer home equity financing
A non-bank mortgage lender is simply a lender that deals exclusively with home loans. It might be an independent mortgage company, an online lender or both. These lenders, also known as independent mortgage banks (IMBs), can stretch requirements more than traditional lenders and often offer more competitive terms.
If you bought your home with a mortgage lender like CrossCountry Mortgage, you might also find home equity financing with them. Online mortgage companies also offer home equity products.
Advantages of applying for a home equity loan from a mortgage lender
They generally feature a broader range of products and product terms.
Since they specialize in home financing, they have extensive knowledge of the market and can offer expert advice tailored to your situation.
They generally offer faster closing times and more lenient borrower requirements than traditional lenders.
4. Online-only lenders
When you work with an online lender, the entire application process often happens without any face-to-face interaction. These companies don’t have branch locations; instead, they operate exclusively online.
Online-only lenders that offer home equity financing
Advantages of applying for a home equity loan from an online-only lender
Online lenders often offer faster approvals and funding times. Their speed is particularly beneficial if you need the money to cover emergency expenses.
You may find more competitive interest rates with online-only lenders. They have lower overhead costs compared to brick-and-mortar banks, and can pass these cost savings on to you.
What’s the best place to get a home equity loan?
The best place for you to get a home equity loan depends on what you define as “best.” You may be looking for the most competitive rates or simply an institution you can trust. Here are some guiding lights for making that decision:
Online lenders are known to offer more competitive interest rates on home equity loans, since they don’t have to maintain physical offices.
Traditional financial institutions offer some of the best introductory rates. Bank of America, for example, is known for its aggressive HELOC teaser rates that are currently more than two percentage points below the national HELOC average.
Credit unions are also able to offer extremely competitive rates and loan terms. In fact, if you look beyond a loan’s interest rate to the annual percentage rate (APR), which also rolls the cost of lender fees and other charges into the equation, you’ll often get the best deal at this sort of lender.
Some might argue that the best place to get a loan is a lender you already have a relationship with. Banks often extend discounted rates or suspend fees for existing customers, and you might have an easier time getting approved as well.
However, the best way to obtain the most competitive home equity loan for your needs and financial profile is to shop around and compare offers, terms and product options from multiple lenders.
Best home equity loan lenders
If you’re considering a home equity loan, look no further than our list of top-rated lenders.
The lending criteria for home equity loans vary by financial institution. However, here’s an idea of what most will expect from homeowners looking to use their property as collateral:
Amount of equity in home: At least 15% to 20%
Credit score: Mid to high-600s, although a minimum 700 is preferred
Required documents when applying for a home equity loan
Here’s what you’ll typically need to provide to apply for a home equity loan:
Driver’s license, state-issued ID or passport
Social Security number
Proof of employment/employer’s contact information
Two most recent pay stubs and W-2 statements
Employment history and dates
Proof of income for the past two years (i.e., tax returns and 1099s if applicable)
Documentation to prove you own the property
Declarations page from your homeowners insurance policy
Frequently asked questions
How much can you borrow with a home equity loan?
The amount you can borrow with a home equity loan entirely depends on your lender and the equity you have in your home. Lenders also look at your financial profile, including your credit history and score, income and debts. Amounts for home equity loans and HELOCs can range from $10,000 up to a maximum $1,000,000, in some cases.
What is the downside to a home equity loan?
Despite their advantages, home equity loans have several downsides to consider. One is that you’ll need at least 20% equity (or 15% in some cases) to qualify, making these loans out of reach for newer homeowners, especially those who made small down payments.
Another is that you’ll have another monthly expense on top of your mortgage, which could strain your budget. It’s also a debt that would have to be settled as soon as you sell your home, cutting into your proceeds. Finally, your lender could foreclose if you don’t repay the loan, displacing you (and your housemates) and damaging your credit.
Is it hard to get a home equity loan?
Because they are riskier for lenders, home equity loans can be tougher to get than regular mortgages or personal loans. The denial rate for HELOCs is about 38%, according to the latest Home Mortgage Disclosure Act data. The best candidates have paid off much of their mortgage, and have higher-than-average credit score and a low amount of debt relative to their income. Still, getting a home equity loan with bad credit may be possible.