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HELOCs vs. Personal Loans


Jan 20, 2023



Which is better depends on your financial situation.Which is better depends on your financial situation.

For homeowners, choosing between a HELOC and a personal loan means you should take into consideration both interest rates and processing times.  

Personal loans are known to be fast and quick ways to access funds. These can be a great option if you do not have any assets such as a home. While personal loans have shorter processing times, they also tend to have higher interest rates. This is because lenders perceive unsecured debt as being riskier.

On the other hand, HELOCs are home equity lines of credit that use your property as collateral. Because of this, these types of loans often come with lower interest rates. Historically, banks have taken upwards of 55 days to process your loan and charge higher interest rates because of the manual effort involved in processing you loan and in their physical branch overhead.  

Nowadays, there are great online lenders who can process your loan in as little as a week and have much lower interest rates - sometimes half the rate of a bank! So, when deciding whether to get a personal loan or HELOC online lenders are going to be a better deal than banks. And if you are a homeowners HELOCs have much lower rates than personal loans.  

Let's say you need $20,000 for home renovations. You could get a personal loan from your bank with an interest rate of, say, 12%. With monthly payments of $400, it would take you just over five years to pay off the loan, and you would end up paying $24,800 in interest.  

Or, you could get a HELOC with an interest rate of just under half that - let's say, at six percent. Your monthly payment is much lower at $200 and you pay off the loan within five years, you would only end up paying $12,000 in interest - half of what you would've paid with a personal loan.  

Of course, there are other factors to consider when taking out a loan - such as whether you are a responsible borrower if you borrowed using your home equity as collateral. But if you're looking strictly at interest rates and repayment periods, a HELOC is always going to be the better option.

What Type of Pole Barn Buildings Can You Finance?

No matter the intended use of a pole barn, it can serve a wide range of purposes. Pole barn financing is available through Hitch’s lending partners for individuals and businesses. There are various types of pole barn buildings that you can finance through Hitch’s lending partners. Some examples include:

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Equal Housing Lender
Hitch, Inc. 23833672158 NW Toussaint Drive. Bend, Oregon 97703

1. Qualified applicants may borrow up to 95% of their home’s value. This does not apply to investment properties.2. HELOCs have a 10-year draw period. During the draw period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) the total of all accrued finance charges and other charges for the monthly billing cycle. During the draw period, the monthly minimum payments may not reduce the outstanding principal balance. During the repayment period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) 1/240th of the outstanding balance at the end of the draw period, plus all accrued finance charges and other fees, charges, and costs.The lender will calculate this amount by taking the outstanding Account Balance on the last day of the draw period and dividing it by 240 months and then adding any finance charge that accrues but remains unpaid during the monthly billing cycle plus any other fees, charges and costs to the fixed principal payment that is due. During the repayment period, the monthly minimum payments may not, to the extent permitted by law, fully repay the principal balance outstanding on the HELOC. At the end of the repayment period, the borrower must pay any remaining outstanding balance in one full payment.3. The time it takes to get cash is measured from the time the Lending Partner receives all documents requested from the applicant and assumes the applicant’s stated income, property and title information provided in the loan application matches the requested documents and any supporting information. Most borrowers get their cash on average in 21 days. The time period calculation to get cash is based on the first 4 months of 2024 loan funding's, assumes the funds are wired, excludes weekends, and excludes the government-mandated disclosure waiting period. The amount of time it takes to get cash will vary depending on the applicant’s respective financial circumstances and the Lending Partner’s current volume of applications. Closing costs can vary from 3.0 - 5.0%. An appraisal may be required to be completed on the property in some instances.4. Not all borrowers will meet the requirements necessary to qualify. Rates and terms are subject to change based on market conditions and borrower eligibility. This offer is subject to verification of borrower qualifications, property evaluations, income verification and credit approval. This is not a commitment to lend.5. The content provided is presented for information purposes only. This is not a The content provided is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply.