U.S. Bank HELOC Review: Flexible payments with a fixed-rate option

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A U.S. Bank HELOC is good to consider for current U.S. Bank customers since you may qualify for multiple discounts. But you may be able to find lower rates elsewhere.


U.S. Bank HELOCs at a glance

Fixed or variable rate: Variable, with the opportunity to convert to fixed

How to withdraw funds: Checks, ATM withdrawals, Visa card, transfer to U.S. bank checking account, in-person withdrawals from U.S. Bank branch

Origination fee: None 

Loan-to-value ratio: Unclear

Time to fund: Generally three business days after closing 
U.S. Bank is one of the largest banks in the United States. The company offers home equity lines of credit, or HELOCs, with amounts between $15,000 and $750,000 of your home equity (up to $1 million in California).

Pros

  • Flexible repayment terms
  • Ability to convert to a fixed interest rate
  • Good range of HELOC loan amounts

Cons

  • Early closure fee during the first 30 months
  • Not everyone will qualify for the best rates
  • Other lenders may offer more-competitive rates

5 things to know about a U.S. Bank HELOC

Here’s a look at some of the top features of a U.S. Bank HELOC. 

1. Flexible payment terms during the draw period

The draw period is the time frame you have to withdraw funds, and U.S. Bank’s HELOC offers a 10-year draw period. During this time, you can choose how to make your minimum monthly payments — either 1% or 2% of your outstanding balance. If you qualify, you can also choose to pay interest-only. 

Once the draw period ends, you’ll need to make principal and interest payments. Your payment amount will be calculated to ensure the balance is paid in full at maturity. If you make interest-only payments during the draw period, your required monthly payments may be significantly higher during the repayment period. 

The ability to choose your repayment terms can help you manage your budget, particularly during the first 10 years. Some borrowers will appreciate this extra flexibility. 

2. Ability to convert to a fixed interest rate

While most HELOCs have variable interest rates and payments, U.S Bank’s HELOC offers the option to convert all or part of your outstanding balance to a fixed-rate loan during the draw period. You can have up to three fixed-rate options at one time, giving you the ability to lock in rates as they change.      

If you choose not to convert the entire balance, anything that’s left will still have a variable rate and a separate payment. 

Converting to a fixed rate may offer some protection against a potential rise in interest rates, and the fixed payment may make it easier to budget. This is not an option with all HELOCs, so it may make a U.S. Bank HELOC attractive to certain borrowers.

3. Not everyone will qualify for the lowest rates

U.S. Bank’s advertised rate is its lowest possible rate for qualified borrowers. It’s based on having a loan-to-value, or LTV, ratio of at least 70%, a FICO credit score of at least 730, a credit limit of $100,000, and a U.S. Bank personal checking account. 

People who don’t meet all of these qualifications could pay a significantly higher interest rate. It’s important to keep that in mind when comparing HELOC products.

4. Early closure penalty and other fees

If you close your U.S. Bank HELOC within the first 30 months, you’ll owe an early closure fee equal to 1% of the original line amount, up to $500.  

While you won’t have to pay closing costs, there may be escrow-related funding costs. If you don’t have a U.S. Bank Platinum Checking account, you may also be charged an annual fee of $90 after the first year. 

5. Automatic payments will get you a lower interest rate

Setting up automatic payments from a U.S. Bank personal checking or savings account will get you an additional 0.50% discount on your interest rate. Having a checking account with U.S. Bank isn’t required to get approved for a HELOC.

Are HELOCs hard to qualify for?

Each lender sets its own requirements to qualify for a home equity line of credit. This typically includes minimum credit scores, income requirements and a specified amount of home equity. 

The stronger these numbers are, the more likely you are to qualify.  

Who is a U.S. Bank HELOC good for?

U.S. Bank’s HELOC’s low minimum of $15,000 and high maximum of $750,000 in most states make it a good option for homeowners who want to access their home equity.

You can use your HELOC for anything, including making home repairs, consolidating debt, covering college tuition or paying for daily expenses. The flexible payment terms and ability to convert to a fixed rate may make this HELOC more attractive than using a credit card, personal loan or home improvement loan for these types of costs. 

How to apply for a U.S. Bank HELOC

Applying for a U.S. Bank HELOC is a three-step process. You can begin the application online, but you’ll need to close in person at a physical U.S. Bank branch. 

Approval requires you to have minimum credit scores and meet other program guidelines. These requirements are not disclosed on U.S. Bank’s website. 

U.S. Bank doesn’t list specific documents you’ll need to submit when you apply, but typically you’ll need things like recent pay stubs, bank statements, tax returns, and any supporting documents for other mortgages and loans. 

Not sure if U.S. Bank is right for you? Consider these alternatives.

  • Figure: This blockchain-focused lender offers a HELOC with competitive rates and allows you to complete the entire process online.  
  • Aven: This home equity credit card also offers cash back on your purchases.

About the author: Beth Deyo is a personal finance freelance writer with a bachelor's degree in Finance from the University of South Florida. She is also a Certified Financial Planner™ with 14 years of wealth management experience. She … Read more.