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Equity Line of Credit Rates

The interest rates that you pay on an equity line of credit determine how much the line of credit will cost you.

Getting really good equity line of credit rates can lower the cost of borrowing money and enable you to pay off the money you borrowed quickly. The term equity line of credit rate refers to the interest rates that are charged on equity lines of credit. Lenders charge these interest rates so that they can make a profit by loaning you money.

It is possible for a homeowner to substantially cut the cost of an equity line of credit by shopping around and getting the best rates. Comparing equity line of credit rates can save you hundreds of dollars when you need to borrow money.

How Equity Line of Credit Rates are Determined

Equity line of credit rates are determined by a number of factors. The main factors are your geographic location and the status of your credit rating.

Interest rates on equity lines of credit vary significantly by location. Persons who live in some areas may pay a much higher interest rate. A borrower can get a significantly lower rate by shopping around and comparing line of credit offers.

Persons who have excellent or good credit will usually get a much better interest rate on an equity line of credit. Individuals with poor or bad credit will pay a much higher interest rate. Persons who want to get a better interest rate should try and clean up their credit before applying.

Shopping for Equity Line of Credit Rates

The best way to get a good rate of interest on your equity line of credit is to shop around for it. Anybody should be able to get a good equity line of credit interest rate by going online.

There are many websites that allow you to compare the interest rates offered by a number of different lenders. Websites like Lending Tree and Bank Rate allow anyone to compare a wide variety of home equity line of credit offers. Using these sites should help a homeowner locate a good interest rate.

Nobody should apply for an equity line of credit before they have looked over several different offers. The more you shop around the better the chance that you’ll get the best interest rate possible.

How to Lower Equity Line of Credit Rates

If you have an existing equity line of credit you should be able to lower the rate by paying off everything you owe on it. Paying off an equity line of credit will eliminate the interest charge and save you money.

This action can also help you get a better interest rate. Once you pay off your equity line of credit you should contact your lender and ask for a better rate. If you’ve got a good history of paying off your equity line of credit and a good credit rating it should be possible to get a better rate.