HELOC vs Personal Loan Calculator
Compare home equity lines of credit and personal loans side-by-side. See which option saves you more based on your home equity, credit score, and how fast you need funding.
TL;DR — HELOC vs Personal Loan
HELOC wins for amounts over $25,000 if you have 20%+ home equity and can wait 2–6 weeks. Rates: 7–9% vs 8–15% for personal loans, plus HELOC interest may be tax-deductible. Personal loans win when you need fast funding (1–3 days), lack home equity, or prefer fixed payments.
Compare Your Options
Enter your details to see a side-by-side comparison of HELOC vs personal loan costs.
$5,000 – $200,000
For HELOC equity calculation
Current amount owed
Affects tax deductibility
HELOC
Home Equity Line of Credit
Best For:
- Large projects ($25K+)
- Homeowners with equity
- Flexible draw needs
- Maximizing tax benefits
Personal Loan
Unsecured Fixed-Rate Loan
Best For:
- Fast funding needs
- No home equity available
- Smaller amounts ($5-25K)
- Renters or new homeowners
Comparison Summary
HELOC saves you $10,930
Lower rate and potential tax deduction make HELOC the better choice for this scenario.
Your equity position: With $150,000 in home equity (37.5%), you qualify for a HELOC. Most lenders require 15-20% equity remaining after the loan.
*Tax deductibility applies to home improvement use under current IRS rules. Consult a tax professional.
When to Choose a HELOC
A Home Equity Line of Credit (HELOC) is typically the better choice when:
- You have significant home equity — At least 20% equity remaining after the loan
- You’re borrowing $25,000 or more — Lower rates offset closing costs on larger loans
- You can wait 2-6 weeks — HELOCs require appraisal and underwriting
- It’s for home improvement — Interest may be tax-deductible
- You want flexible access — Draw funds as needed during the draw period
HELOC Rate Ranges by Credit Score (March 2026)
| Credit Score | HELOC APR Range | Notes |
|---|---|---|
| Excellent (740+) | 7.00% – 8.50% | Best rates, lowest fees |
| Good (670-739) | 8.00% – 9.50% | Competitive rates available |
| Fair (580-669) | 9.50% – 11.50% | Limited lender options |
| Poor (below 580) | 11.50%+ or declined | Very limited availability |
When to Choose a Personal Loan
A personal loan is typically the better choice when:
- You need money fast — Funding in 1-3 business days
- You don’t have home equity — Renters or new homeowners qualify
- You prefer fixed payments — Same payment every month, no rate changes
- You’re borrowing under $25,000 — Closing costs make HELOCs less attractive for smaller amounts
- You don’t want to risk your home — Personal loans are unsecured
Personal Loan Rate Ranges by Credit Score (March 2026)
| Credit Score | Personal Loan APR Range | Notes |
|---|---|---|
| Excellent (740+) | 8.00% – 12.00% | Best rates, 0% origination possible |
| Good (670-739) | 10.00% – 15.00% | Wide range of options |
| Fair (580-669) | 15.00% – 23.00% | Higher fees common |
| Poor (below 580) | 23.00% – 36.00% | Limited options, high fees |
Pro Tip: Check both options
Even if you have home equity, it’s worth comparing both options. Some personal loan lenders offer rates competitive with HELOCs for borrowers with excellent credit, without the closing costs or wait time.
Cost Comparison by Loan Amount
Here’s how the total costs compare at different loan amounts, assuming good credit (670-739) and a 10-year term:
| Loan Amount | HELOC Total Cost | Personal Loan Total Cost | Savings with HELOC |
|---|---|---|---|
| $10,000 | $12,460 | $13,950 | $1,490 |
| $25,000 | $30,775 | $34,875 | $4,100 |
| $50,000 | $61,175 | $69,750 | $8,575 |
| $100,000 | $121,975 | $139,500 | $17,525 |
*Based on 8.5% HELOC APR with 2.5% closing costs vs 12% personal loan APR with 3% origination fee. Actual rates vary by lender and credit profile.
Qualification Requirements
| Requirement | HELOC | Personal Loan |
|---|---|---|
| Minimum Credit Score | 620-680 typical | 580-620 typical |
| Home Equity Required | 15-20% after loan | None |
| Maximum DTI Ratio | 43-50% | 40-50% |
| Home Appraisal | Required | Not required |
| Income Verification | Full documentation | Varies by lender |
| Collateral | Your home | None (unsecured) |
Important: Understand the risk
A HELOC uses your home as collateral. If you can’t make payments, you risk foreclosure. Personal loans are unsecured — if you default, it damages your credit but doesn’t put your home at risk.
HELOC vs Personal Loan FAQ
Can I get a HELOC with bad credit?
It’s difficult but possible. Most HELOC lenders require a minimum credit score of 620–680. If your score is below 620, you may need to look at personal loans designed for fair or poor credit. Some credit unions offer more flexible HELOC requirements for members.
Is HELOC interest still tax deductible?
Yes, but only if you use the funds to “buy, build, or substantially improve” your home. The Tax Cuts and Jobs Act of 2017 eliminated the deduction for other uses like debt consolidation. Deduction is limited to interest on up to $750,000 of total mortgage debt. Always consult a tax professional.
How fast can I get a personal loan vs HELOC?
Personal loans can fund in 1–3 business days after approval, sometimes same-day. HELOCs typically take 2–6 weeks because they require a home appraisal, title search, and more extensive underwriting.
What if I don’t have 20% equity?
If you have less than 20% equity, a personal loan is likely your best option. Some lenders offer HELOCs with as little as 15% equity remaining, but terms are usually less favorable.
Which is better for home improvements?
HELOCs are typically better for home improvements over $25,000 because of lower rates and potential tax deductibility. For smaller projects under $15,000, a personal loan may be simpler with less paperwork.
Can I use a personal loan to pay off a HELOC?
Yes, this can make sense if you want to convert variable-rate HELOC debt to a fixed rate, or if you’re selling your home and need to clear the HELOC lien before closing. Compare total costs carefully.
What’s the difference between a HELOC and home equity loan?
A HELOC is a revolving line of credit with variable rates. A home equity loan is a lump sum with fixed rates and payments. Both use your home as collateral. HELOCs offer flexibility; home equity loans offer predictability.
What about cash-out refinance vs HELOC?
Cash-out refinance replaces your entire mortgage. It makes sense when current mortgage rates are lower than your existing rate. If rates are higher, a HELOC is usually better because you keep your low-rate first mortgage.
Are there any fees I should watch out for?
For HELOCs: Watch for annual fees ($50–100), early termination fees, and inactivity fees. For personal loans: Origination fees (1–8% of loan) are most common. Always compare the APR, which includes most fees.
What happens to a HELOC if I sell my house?
The HELOC must be paid off from the sale proceeds at closing, just like your first mortgage. The outstanding balance is deducted from your net proceeds.
Can I have both a HELOC and a personal loan?
Yes, many people have both. Lenders will look at your total debt-to-income ratio when evaluating applications. Having existing debt doesn’t disqualify you, but it may limit how much you can borrow.
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