How a home equity loan works

When you take out a home equity loan, the lender approves you for a loan amount based on the percentage of equity you have in your home. Some lenders might require you to pay closing costs to get a home equity loan. The best home equity loan lenders offer a variety of repayment terms, low interest rates and few fees. Each lender will evaluate your eligibility differently, so shopping around can help you find the best offer. Your rate will depend on your credit score, income, home equity and more, with the lowest rates going to the most creditworthy borrowers.

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