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The simplest way to turn your home equity into flexible funds. See your interest rate and credit limit in minutes, with no impact on your credit score.
$120,000 Credit limit
$1,025 Est. mo. payment²
A HELOC through Prosper is a flexible line of credit that uses up to 95%3 of your home equity to access up to $500,000* at a low rate.
From home improvements and major purchases to debt consolidation, family expenses, and everything in between.
A Home Equity Line of Credit (HELOC) is a line of credit secured by your house that usually comes with low variable interest rates.
This means your home acts as collateral for your line of credit in case you are unable to make your monthly payments. Because your line of credit is secured, the APR you receive may be lower than unsecured loans or credit cards.
You can use a HELOC for a variety of things: debt consolidation, home improvements, major purchases (appliances, cars, RVs, boats, etc.), and many other expenses***. It works much like a credit card. HELOCs give you flexibility in your monthly payments. You can even make interest-only payments during the draw period (up to the first 10 years of your HELOC)2.
If you’ve built up equity in your home and you’d like to have flexible access to borrow a large sum of money, then a HELOC might be a great option for you.
HELOCs can be used for all kinds of expenses, such as ongoing home improvements or other investments, or can even be used as an emergency needs fund. Because they’re secured by your home, you may be able to access more money at lower interest rates than with a credit card or personal loan. Unlike with a HELoan, which is delivered as a single large lump sum up front, you only pay interest on what you draw from your HELOC, and you can even choose to make interest-only payments² for the first 10 years of your HELOC’s life.
A HELOC is a line of credit that you can draw on any time for a specific draw period (usually 10 years), and a HELoan is a loan that you take out in one lump sum upfront.
Both HELOCs and HELoans are financing options that allow you to borrow against equity that you’ve built in your home, which can offer access to more money with lower interest rates than personal loans or credits cards can offer. HELOCs typically have variable APRs, which means their interest rates are based on the Prime Rate as published in the Wall Street Journal and are likely to change over time. HELoans typically have fixed APRs, which means a single interest rate is in effect for the life of the loan. This means your monthly payments are consistent, which makes it easier to make a budget—and stick to it.
For more information on the differences between a HELOC and a HELoan and how you might choose if one of them is the best option for you, visit Prosper’s popular blog article that breaks it all down: HELOC vs HELoan: What’s the difference?
HELOCs typically have requirements about the minimum you need to draw at the beginning, but beyond that, you usually don’t ever need to draw HELOC funds that you don’t need*.
Remember, you don’t pay interest on any HELOC funds you don’t borrow. Furthermore, you can choose to pay off your balance, accrued interest, and fees any time.
During a HELOC’s draw period, you can draw however much you need* up to your maximum credit line, repay it, and draw again. You can also choose to make interest-only monthly payments² and wait until the repayment period to repay the principal you borrowed.
A home equity line of credit can be refinanced at any time, although there may be some limitations depending on where you live and your lender’s requirements.
What’s more, there’s usually no prepayment penalty for closing out a HELOC. One thing to bear in mind is that you only pay interest on the cash you borrow, so if you want you can pay your balance down to $0, you can keep the line open to use in the future if you need it at a later date.
HELOCs can be used for home improvements, debt consolidation, paying off a mortgage, major purchases (appliances, cars, RVs, boats, etc.), and even miscellaneous expenses.*** For more on these popular uses of HELOCs, see Prosper’s ebook, 4 Ways to Use a Home Equity Line of Credit.
You’ll pay back a HELOC much the same way you do a credit card, but you can choose how much principal you want to repay during the draw period, or even make interest-only payments² during that time.
Once the repayment period begins, you must start paying back any outstanding balance plus interest. Your repayment period can last up to 20 years2, although there’s usually no penalty for paying off your HELOC early.
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1This HELOC has a variable interest rate. The APR may change and will be based on the value of an index. The “Index Rate” will be the highest Prime Rate as published in the “Money Rates” table of The Wall Street Journal as of the first business day of the calendar month. To determine the initial rate, Spring EQ will add a “Margin” of 1.900 percentage point(s) to the value of the Index. The initial periodic rate which will be used to calculate the Finance Charge is the Daily Periodic Rate of 0.0286% and the corresponding APR of 10.438%. The APR includes interest and closing costs. The APR will increase or decrease if the Index Rate increases or decreases. An Index Rate increase will result in a higher finance charge, and it may have the effect of increasing your monthly minimum payment. A decrease in the Index Rate will have the opposite effect to an increase. During the term of the HELOC, the APR will not go below 2.99% and will not exceed 18% or the maximum APR allowed by applicable law, whichever is less. Interest rates may be adjusted based on factors specific to each applicant, including but not limited to, the applicant’s credit profile, income and debt ratios, the presence of existing liens against and the location of the subject property, the occupancy status of the subject property, as well as the initial draw amount taken at the time of closing. Speak to a Prosper Agent for details.
3Qualified applicants may borrow up to 95% of their primary home’s value (not applicable in Texas) and up to 85% of the value of a second home. Home equity loan applicants may borrow up to 70% of the value of an investment property (not applicable for HELOCs). For Texas HELOCs, applicants may borrow up to 80% of their home’s value.