If a Home Equity Loan or HELOC Isn't Available or Fast Enough, Is a Personal Loan a Better Alternative?
It can be, when speed matters more than the rate or when borrowing against your home isn't an option. A personal loan often funds within about a week and needs no home valuation. It usually costs more, though, because nothing secures it. A home equity loan or HELOC generally carries a lower rate, and the trade-off is that your home secures the debt.
Last updated September 29, 2026Which option costs less?
Usually the home equity loan or HELOC. Because your house backs it, the lender takes less risk and can charge a lower rate. A personal loan is unsecured, so lenders charge more to cover the risk. Both depend heavily on your credit, and for home equity, on how much of your home's value you're borrowing. The CFPB points out the other side of that lower rate: if you can't repay a HELOC, you could lose your home.
Which option funds faster?
Usually the personal loan. There's no home to value, and many personal loan lenders approve and fund in about one to seven days once your application is complete, sometimes the same day. A home equity loan or HELOC takes longer, largely because the lender has to value the home first. That's often an automated value, but a full appraisal can add days to weeks.
It depends on your situation:
- You need the money in a few days and can accept a higher rate: a personal loan is likely faster.
- You have equity and can wait a little longer: a home equity loan or HELOC usually costs less over time.
- You don't have enough equity, don't own a home or can't get a home equity product: a personal loan may be your main option. Lenders in our network that focus on mortgages commonly don't offer personal loans themselves.
- You need a small amount for a short time versus a large amount: the faster funding may matter more for a small need, while the lower rate adds up on a large one.
| Secured by your home? | Yes |
|---|---|
| Rate | Usually lower |
| Home valuation needed? | Yes, often automated, sometimes a full appraisal |
| Typical time to funds | Days to a few weeks |
| Risk if you can't repay | You could lose your home |
Related questions
- HELOC vs home equity loan vs cash-out refinance
- how Does a Reverse Mortgage Work, and How Does It Compare to Other Equity Options
- can I still pull equity out of my home if I already have a reverse mortgage, even if my current reverse-mortgage lender won't help
- is the Interest on a Home Equity Loan or HELOC Tax Deductible
- what determines your mortgage rate quote
Sources
- https://www.experian.com/blogs/ask-experian/heloc-vs-personal-loan-which-is-better
- https://www.navyfederal.org/makingcents/home-ownership/heloc-home-equity-loan-vs-personal-loan.html
- https://www.federalreserve.gov/releases/g19/current/
- https://www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-line-of-credit-heloc-en-107
- https://themortgagereports.com/97647/heloc-appraisal-requirements
- https://www.cnbc.com/select/6-personal-loans-thatll-get-you-funded-in-as-little-as-1-business-day
- https://wallethub.com/edu/iti/average-personal-loan-interest-rate/91711
Sourced from licensed loan officers and brokers in the FreeRateUpdate network.
Educational information only, not individualized financial or legal advice. Program details and rates change; verify current terms with a licensed loan officer before making a decision.