Loans & Lines of Credit
There are many types of personal loans available to Core Bank customers. Take a look at some other types of personal loans we offer and find the one that’s right for you!
Helping You Understand Home Equity Lines of Credit
Are you wondering how a home equity loan works, whether home equity loans are tax deductible, or whether a home equity loan or a line of credit is right for you? When you work with Core Bank, our team of experienced professionals will help you better understand the options available to you and the benefits they pose.
Reach out to our team today to learn more about our available lines of credit and loan options!
Home Equity Loan Vs. Line of Credit
While home equity loans and lines of credit are both ways to use your residence as collateral, they’re very different in how they work.
Home equity loans come with fixed payments for a specified term, giving borrowers a predictable schedule of payments over a defined period of time. They often arrive as a lump sum with a fixed interest rate.
Home equity lines of credit are revolving lines of credit with interest rates that fluctuate over the life of the loan. They operate somewhat like a credit card, allowing you to draw money as you need it—given that you keep up your payments. You only pay interest on the money that you use.
How to Get a Home Equity Loan
Our team at Core Bank can help you decide between a home equity loan or a home equity line of credit, then apply for the option that best suits your needs! There are five base requirements you’ll typically need to meet to secure one of these loans:
- Have 10% equity in your home
- Have a debt-to-income ratio of 41% or lower (can be approved without meeting this ratio)
- Have sufficient income
- Have a reliable payment history
Cash Secured Loan
A cash-secured loan is a credit-building loan that you qualify for with funds you keep with Core Bank.
Auto loans are secured loans where the vehicle itself is used as a collateral.
An Unsecured Loan is a loan provided solely based on the creditworthiness of the borrower without pledging any collateral as security in the event of default or non-payment of dues.
Personal Loan FAQs
How do I know which type of small personal loan is right for me?
All personal loans have pros and cons based on your situation. If you have a seasoned professional to help you sift through them, you can find the best option and achieve your financial goals. Let our team at Core Bank help you find your ideal personal loan!
How does my credit score affect the type of loan I can apply for?
The higher your credit score, the more likely you’ll be approved for a personal loan. You will also likely get better interest rates. A low credit score might make applying for some loans difficult, though having a cosigner will typically improve your chances of getting approved.
What can I use my personal loan for?
This varies from loan to loan. Some, such as personal lines of credit, can be used for any purpose. Others, like debt consolidation loans, have specific uses. Your lending professional at Core Bank can help you determine which loan is right for you depending on what you intend to use the funds for.
How many personal loans can I have at one time?
Technically, there is no limit to how many personal loans you can have at once. If you have a good credit score and a strong history of on-time payments, lenders may be willing to approve multiple loans at the same time. You must be extremely organized to take on multiple small personal loans and ensure all payments are made on time.
What is the interest rate on personal loans?
The interest rate varies based on multiple factors, including the type of loan you’re applying for, your credit score, annual income, payment history, and debt ratios.
How do personal loans affect your credit score?
Personal loans can hurt or help your credit score depending on how you manage them. If you make your payments on time and establish a positive payment history, you can increase your credit score. However, lenders must perform a credit check on you any time you apply for a line of credit, which decreases your credit score. In addition, missed payments can significantly damage your score.
What can I use a home equity loan for?
You can use the money from your home equity loan to pay for anything. The funds are yours. It is common to see these loans used for home improvements, debt consolidation, funds to put down on a new home purchase, or just emergency funds! It is best to apply for credit when you don’t need it.
Are home equity loans tax deductible?
Home equity loan interest is tax-deductible if your mortgage debt is within government limits and the borrowed money was used to build, buy, or improve your home. Consult a qualified tax advisor for more information on what’s allowable.
Do home equity loans require escrow?
Lenders often require that their borrowers create an escrow account when they finance the purchase of a home with a mortgage loan. At Core Bank, we do not require an escrow account with a home equity loan.
Is a Line of Credit or Loan Better for me?
Core Bank can assist in determining this, however, a line is right for someone who is uncertain of the amount they will ultimately need or if it’s being used as overdraft protection or emergency funds. Lines allow for low monthly payments, often interest only as well as the ability to advance funds when you need them. Loans can provide peace of mind as the rate is fixed for the term and payments will ensure the debt is paid upon maturity of the loan.
Contact Core Bank
If you’re ready to get started with any treasury services from Core Bank, let us know! Get in touch with our team today.
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