For current U.S. Bank customers, a U.S. Bank HELOC may be worth considering as you could qualify for multiple discounts. You may find lower rates elsewhere.
U.S. U.S. Bank HELOCs at A Glance
Fixed rate: Variable. You can convert to fixed.
How can I withdraw funds? Checks, ATM withdrawals and Visa card. Transfer to U.S. Bank checking account. In-person withdrawals from U.S. Bank branches.
Origination fee: None
Loan to-value ratio Unknown
Funding takes approximately three business days from the closing.
U.S. Bank is the United States’ largest bank. U.S. Bank offers home equity loans, or HELOCs. These lines of credit are available in amounts up to $750,000 and $15,000 respectively.
- Flexible terms for repayment
- Convert to fixed rate of interest
- A good range of HELOC loan amounts
- Early closure fee for the first 30 month
- Some people may not be eligible for the highest rates.
- Some lenders might offer higher rates than others
5 Things You Need to Know About a U.S Bank HELOC
Here are some highlights of a U.S. Bank HELOC.
1. Flexible payment terms during the draw period
Draw period refers to the amount of time you must withdraw funds. U.S. Bank’s HELOC provides a 10-year draw period. You can make your minimum monthly payments at 1% or 2.5% of your balance during this period. You can also opt to pay interest only if you are eligible.
After the draw period expires, you will need to make principal or interest payments. To ensure that the balance is fully paid at maturity, your payment amount will be calculated. Your monthly payments could be substantially higher if you pay interest-only during the draw period.
You can choose the repayment terms that you want to use, which will help you manage your finances, especially during the first ten years. This flexibility is appreciated by some borrowers.
2. Convert to fixed rate of interest
Although most HELOCs offer variable interest rates and payment, U.S Bank’s HELOC allows you to convert any or all of your outstanding balance into a fixed rate loan during the draw period. You can choose up to three fixed rate options simultaneously, allowing you to lock in rates when they change.
You can choose to not convert the whole balance. However, any remaining amount will still be subject to a variable rate as well as a separate payment.
A fixed rate conversion may provide some protection from an increase in interest rates and may be easier to budget. It is not possible with all HELOCs so it might make the U.S. Bank HELOC more appealing to some borrowers.
3. Some people may not be eligible for the lowest rates.
U.S. Bank advertises the lowest rate possible for qualified borrowers. It is based on a minimum loan-to-value (or LTV) ratio of at most 70%, a FICO score of at the least 730, credit limits of at least $100,000 and a U.S. Bank personal banking account.
People who do not meet these requirements could be subject to a higher interest rate. This is important to remember when comparing HELOC products.
4. Early closure penalty and additional fees
You’ll be charged an early closing fee of 1% of the line amount if you close your U.S. Bank HELOC in the first 30 month. This can go up to $500.
Although you won’t be charged closing costs, there could be funding fees related to escrow. You may be subject to an additional $90 annual fee if you do not have a U.S. Bank platinum checking account.
5. You will enjoy a lower interest rate if you make automatic payments
You will receive an additional 0.50% discount by setting up automatic payments through a U.S. Bank personal savings or checking account. A checking account with U.S. Bank does not require you to be approved for a HELOC.
Is it difficult to get HELOCs?
Every lender has its own criteria for home equity lines of credit. These requirements typically include minimum credit scores, income requirements, and a specific amount of home equity.
These numbers will increase your chances of qualifying.
What is a U.S. Bank HELOC good at?
The HELOC offered by U.S. Bank is a great option for homeowners looking to access their home equity. It has a low minimum of $15,000 and a high maximum of $750,000 in most States.
Your HELOC can be used for any purpose, such as home repairs, consolidating debt or covering college tuition. Flexible payment terms and the ability to convert to fixed rates may make the HELOC more appealing than using a personal loan, credit card or home improvement loan to cover these costs.
How to Apply for a U.S. Bank HELOC
Three steps are required to apply for a U.S. Bank HELOC. Online applications are possible, but you will need to submit your application in person at a U.S. Bank branch.
You must have minimum credit scores and follow other program guidelines to be approved. These requirements are not listed on the U.S. Bank website.
U.S. Bank does not list any specific documents that you will need for your application. However, you will need recent pay stubs and bank statements. Tax returns and supporting documents are also required for other loans and mortgages.
Are you unsure if U.S. Bank is the right fit for your needs? These are some alternatives.
- Figure This lender is blockchain-focused and offers HELOCs at competitive rates. You can also complete the whole process online.
- Aven This home equity credit card offers cash back for your purchases.