Home Equity Line of Credit (HELOC)

  • Can I pay off my HELOC during my draw period?

    Yes, you can always pay off your HELOC early.

     

    If you pay your HELOC down completely during the draw period, then you’ll still have your line of credit open to use until the draw period ends.

  • When will I start making monthly payments on my HELOC?

    Once you start drawing on your line of credit, you will be expected to make monthly payments. However, during the draw period, you can decide to pay either interest only or interest and principal payments. Your lender can provide more information about when your first payment will be due.

  • I applied for a HELOC but I also have a personal loan through Prosper. Does this mean my payments will be combined?

    We’re happy that you’re interested in working with Prosper!

    To answer your question, no – the payments for a HELOC and the payments for a Personal Loan cannot be combined, so you’ll need to pay them separately.

  • How long does the HELOC application process take?

    HELOCs typically involve a time-consuming application and verification process—including a hard credit pull that impacts your credit score just to see your offer.

    We’ve streamlined and securely digitized that process, empowering you to get a HELOC in only a few weeks! Better yet, you can see your instant, personalized offer without affecting your credit score. 

  • How do I apply for a HELOC through Prosper?

    We’re happy to hear that you’re interested in a HELOC through Prosper! You can easily complete your application online by visiting https://www.prosper.com/heloc. 

    If you have questions, you can check out our HELOC FAQ or speak with one of our HELOC support specialists by calling 800-954-2172.

  • What is a 'repayment period' for a HELOC?

    During the repayment period you'll pay down what you owe by making a monthly payment calculated using the interest rate in effect at the start of your repayment period.

    When rates decrease, less interest is due, so more of your monthly payment repays the principal balance.

    When rates increase, more interest is due, so less of your monthly payment repays the principal balance. In this case, you may need to make a single "balloon" payment to cover your unpaid balance in full at the end of your repayment period.

     

    For Texas HELOCS different rules apply: if the interest rate increases during your repayment period, then your monthly payment will also increase in order to repay your balance by the end of the repayment period.

  • How long is the repayment period for my HELOC?

    Your repayment will typically last 20 years. This is the time during which you must repay any outstanding principal and interest on your HELOC. You cannot borrow from your HELOC during this 20-year repayment period.

  • How much will my monthly payments be for my HELOC?

    Payments are calculated based on the outstanding line balance each month. And, you can always pay off your outstanding balance at any time.

     

    Because HELOCs are lines of credit, monthly payment amounts are not usually fixed. 
     
    During the draw period (up to 10 years), you will be required to make monthly payments of accrued interest, plus any principal balance in excess of your credit limit, with a minimum payment of $100.00. Please note that if you only pay accrued interest during the draw period, your monthly payment during the repayment period may increase substantially. 
     
    During the repayment period, your minimum monthly payment will be an amount necessary to repay the outstanding balance over the repayment period, based on the APR in effect at the start of this period. If rates increase after the repayment period begins, your monthly payment will increase so that the balance is fully repaid at maturity.  

  • Can I pay off my HELOC early?

    Yes, you can pay off a HELOC early. However, there are concerns to be aware of. There are two payment periods in a HELOC agreement: the draw period and the repayment period. The draw period is set by your lender and usually lasts about 10 years. This is the time frame in which you are actively borrowing. Typically, you are only required to pay off the interest on your HELOC during the draw period.  You can always pay off your entire outstanding balance at any time.

  • Can I still draw on my Home Equity Line of Credit during the "repayment period?"

    During the repayment period, you can no longer draw on your line, and you must start paying back any outstanding balance plus interest. Your repayment period will typically last 20 years. 

     

    Please note that paying the minimum monthly amount may not fully repay the outstanding principal on your HELOC. Once the repayment period ends, any unpaid balance, interest, and fees must be paid in one final balloon payment. 

  • What is a "draw period" for a HELOC?

    During the draw period, you can use up to your maximum line amount, and you may also make interest-only payments, which can result in a lower monthly payment. Your draw period may last up to 10 years. 

  • What does "term" mean for a HELOC?

    A HELOC through Prosper comes with a 30-year loan term, which is the total duration of your draw period plus your repayment period.  

  • How does a HELOC work?

    Your maximum line amount is based on the amount of equity you have in your home, your creditworthiness, your debt-to-income ratio, and other factors. Typically, HELOCs have a 20-25 year term with two distinct phases: 1) the initial draw period which can last up to 10 years, and 2) the repayment period which can last 10-15 years. 

     

    TERM: HELOCs usually have a 20-25 year term, which is the total duration of your draw period + your repayment period.  
     

    DRAW PERIOD: During the draw period, you can use up to your maximum line amount, and you may also make interest-only payments, which can result in a lower monthly payment. Your draw period may last up to 10 years. 
     
    Please note that paying the minimum monthly amount may not fully repay the outstanding principal on your HELOC. Once the repayment period ends, any unpaid balance, interest, and fees must be paid in one final balloon payment.   

     

    REPAYMENT PERIOD: During the repayment period, you can no longer draw on your line, and you must start paying back any outstanding balance plus interest. Your repayment period may last up to 15 years. 

  • Can I apply for a HELOC if I have an FHA loan?

    Yes, you can apply for a HELOC on our platform if you have an FHA loan. 

  • Can I get a HELOC if I have a mortgage?

    A mortgage won't deter your eligibility to apply for a HELOC, provided that you’ve had your mortgage for at least 1-2 years and have built up enough equity in your home to borrow against. 

  • How is the estimated max line amount calculated for my HELOC?

    If you’ve received both a Personal Loan and a HELOC offer, your estimated maximum line of credit is based on your requested personal loan amount. 

     

    Otherwise, the credit limit or maximum line amount on your HELOC is based on the amount of equity you have in your home, your creditworthiness, your debt-to-income ratio, and other factors.  

  • What is the difference between a fixed rate and variable rate for my HELOC?

    A HELOC through Prosper has a variable rate, meaning the interest you pay could increase or decrease. Changes to this rate are calculated by adding the margin identified in your credit agreement to the current prime rate (https://www.wsj.com/market-data/bonds). 

     

    During the draw period, you can make interest-only monthly payments with a minimum payment of $100. Paying more than the interest you owe will enable you to borrow additional money during the draw period.

     

    During the repayment period you'll pay down what you owe by making a monthly payment calculated using the interest rate in effect at the start of your repayment period. When rates decrease, less interest is due, so more of your monthly payment repays the principal balance. When rates increase, more interest is due, so less of your monthly payment repays the principal balance. In this case, you may need to make a single “balloon” payment to cover your unpaid balance in full at the end of your repayment period. For Texas HELOCS, different rules apply: if the interest rate increases during your repayment period, then your monthly payment will also increase in order to repay your balance by the end of the repayment period. 

  • How will the APR for my HELOC be determined?

    Your APR will depend on a number of factors, including your credit history. The Variable APR includes only interest and does not reflect closing costs or other fees that may apply. This APR can change over time and is based on The Wall Street Journal US Prime Rate plus a margin as identified in your credit agreement.  

  • How is my equity calculated?

    Home equity is calculated by subtracting the amount of money you still owe on your house from the total value of your home. For example, if your home is valued at $300,000 and you owe $200,000 on your mortgage, your current equity is $100,000. 

     

    Most lenders consider your home equity in terms of a “combined loan-to-value ratio” or CLTV. CLTV is your overall mortgage loan debt expressed as a percentage of your home’s fair market value.  Given the example above, you would have a CLTV of 66.67%.

     

    When you get a HELOC through Prosper, depending on your creditworthiness and debt-to-income ratio, you may qualify for a HELOC with a CLTV as high as 97.5%.  In the example above, this means you could owe as much as $292,500 on your mortgage and still qualify.

  • What can I use my HELOC for?

    You can use your HELOC for a variety of things including home improvements, debt consolidation, major purchases (appliances, cars, RVs, boats, etc.), and even miscellaneous expenses.

  • How is a HELOC through Prosper different?

    HELOCs typically involve a time-consuming application and verification process—including a hard credit pull that impacts your credit score just to see your offer. 

     

    We’ve streamlined and securely digitized that process, empowering you to get a HELOC in only a few weeks! Better yet, you can see your instant, personalized offer without affecting your credit score. 

  • What’s a HELOC? / What’s a Home Equity Line of Credit?

    A Home Equity Line of Credit (HELOC) is a line of credit you can access for a variety of things: debt consolidation, home improvements, major purchases (appliances, cars, RVs, boats, etc.), and many other expenses. 

     

    It works much like a credit card. But, because it’s secured by your house, you may be able to access more money at lower interest rates than with a credit card or personal loan. 

     

    HELOCs also give you flexibility in your monthly payments. You can even make interest-only payments during the draw period (up to the first 10 years of your HELOC).