APR 5.99% – 35.99%·$100 – $50,000

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Head to head

Personal loan vs HELOC.

Both can fund a home-improvement project. A personal loan is unsecured, fast, and predictable; a HELOC is secured by your home, usually cheaper per dollar, but takes weeks to close and puts your home on the line if you can't repay.

Side by side

Personal loan vs HELOC

AttributePersonal loanHELOC
CollateralUnsecured (none)Secured by home equity
APR range (typical)5.99% to 35.99% fixed8% to 12% variable
Loan amount$500 to $50,000Up to ~85% of home equity (often $50k-$250k+)
Time to fundNext business day30-45 days from application to close
Closing costs0%-8% origination, no third-party costs2%-5% in appraisal, title, recording, and closing fees
RepaymentFixed monthly installments, defined termInterest-only draw period, then amortising repayment
Lien on propertyNoneYes, second-position lien
Tax deductibilityNot deductibleInterest may be deductible if used to substantially improve the home (consult tax pro)
Best forSpeed, smaller projects, borrowers with no equityLarge projects ($50k+) by homeowners with significant equity who can wait
Verdicts by scenario

Which wins, when.

  1. 01

    $15,000 kitchen refresh, you want to start next week

    Winner: Personal loan

    Personal loan funds in days, no appraisal, no lien. The APR is higher but the project starts on time.

  2. 02

    $80,000 whole-house renovation, no rush

    Winner: HELOC

    HELOC's lower APR more than offsets closing costs on big projects. Possible tax deduction adds margin. Worth waiting 30+ days.

  3. 03

    First-time homeowner with little equity

    Winner: Personal loan

    A HELOC needs equity you don't yet have. Personal loan underwrites to credit and income only.

  4. 04

    You'd panic if a future job loss put your house at risk

    Winner: Personal loan

    HELOCs can be frozen by the lender and worst-case lead to foreclosure. Personal-loan default is bad for credit but doesn't touch the house.

Common questions

Frequently asked.

Can I get a HELOC if I just bought my home?+

Usually not for the first 6-12 months. Most lenders want to see established equity. Many also require at least 15%-20% equity before they'll lend.

Is a home equity loan different from a HELOC?+

Yes. A home equity loan is a lump-sum installment loan secured by your home equity, closer in shape to a personal loan but secured and cheaper. A HELOC is a revolving credit line you can draw from. Both put a lien on the home.

What credit score do I need for a HELOC?+

Most HELOC lenders want a FICO of 680+, a debt-to-income ratio under 43%, and at least 15-20% equity. Personal-loan minimums are looser (often 600+ and no DTI cap beyond 50%).

Can I use a personal loan and a HELOC together?+

Yes. Some borrowers use a personal loan for the immediate phase of work (avoiding the wait) and a HELOC to fund the rest once it closes. Make sure your DTI accommodates both payments.

Other comparisons

Compare real personal-loan offers.

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