is a HELOC right for you?

Whether you need another line of credit or just want to consolidate your debt, we can help you weigh the pros and cons of a home equity loan.

A home equity line of credit, also known as a HELOC, is an ideal solution for achieving short- and long-term financial goals — but that doesn’t mean it’s right for everyone. So, what factors should you consider before applying for a HELOC? To get started, answer a few preliminary questions, and then dive into the pros and cons.

Interest rates on a HELOC typically are lower than on a credit card or personal loan.

Questions to ask before applying for a HELOC

  • What will the funds be used for?
  • How much money do you want to borrow?
  • How healthy is your credit history?
  • How much debt do you currently have?
  • Do you consider yourself a disciplined borrower?

Reasons to get a HELOC

The many benefits of a home equity line of credit make this borrowing option attractive to many homeowners. Here are several reasons a HELOC may be right for you.

You want to make home repairs or renovations

Because a home equity line of credit functions more like a credit card than a traditional loan, you can access however much money you need, when you need it, up to your credit limit. This flexibility makes a HELOC ideal for funding home renovations and repairs.

Also, if you use a HELOC to fund home renovations, your interest payments may be tax-deductible, providing you with an opportunity to lower your tax liability while improving the value of your home.1

You want a low-interest loan option

While the interest rate on a HELOC will vary over time, First Financial Bank is currently offering very competitive rates. Interest rates on a HELOC typically are lower than on a credit card or personal loan. Contact us to find out about our current interest rates on a HELOC.

You want to avoid up-front costs

A home equity line of credit is perfect for someone who wants to avoid up-front costs.

First Financial Bank is waiving all closing costs and approval fees for HELOC applications on owner-occupied dwellings.

You want more control over what you owe

A HELOC allows you to decide when and how much you withdraw, which means that you can control how much you have to repay.

Reasons a HELOC isn’t right for you

A home equity line of credit isn’t one-size-fits-all; you may find that a personal loan or credit card may be a better option for your financial goal. Here are some reasons a HELOC may not be the right choice.

You’re not borrowing much money

If you aren’t borrowing a significant amount of money, you might want to consider a personal loan or a credit card. The variable interest and long-term repayment schedule of a HELOC may be prohibitive in small borrowing scenarios. For help choosing the best option for your situation, visit your local banking center or contact us.

You don’t want a variable interest rate

Because the interest rate on a HELOC is normally tied to the prime rate, it will vary as the prime rate moves. This will also adjust your minimum monthly payments as the interest due would change.

You don’t have a steady income

A HELOC uses your home as collateral, which means there is a risk of foreclosure if you can’t pay the loan.

You already have a significant amount of debt

While debt can be a useful tool for funding your goals, it doesn’t come without some level of risk. It’s always important to understand the risks of adding more debt to your financial situation.

You’re not a disciplined borrower

A HELOC offers a low initial interest rate and easy access to your funds — benefits that can make it easy to overspend. A borrower can max out their credit line and face higher monthly payments as a result.

Alternative options to a HELOC

A home equity line of credit is only one of the options First Financial Bank offers to help you turn your to-dos into done. Here are a few alternatives to a HELOC that you might want to consider.

Home equity installment loan

Similar to a HELOC, this loan option uses the equity in your home, but generates a lump sum rather than a flexible line of credit. A home equity installment loan is an excellent choice for financing home renovations or repairs while providing low fixed interest rates and repayment terms.

Personal loan

A more flexible option for smaller expenses, personal loans take less time to originate.  These loans are great for unexpected expenses or consolidating small debts. They also tend to have a higher interest rate as they are normally unsecured.

Credit card

No matter what you want in a credit card, we’ve got the one for you. Our Platinum and Platinum Rewards cards let you choose between unlimited points or a low interest rate. Neither of our credit options requires annual or balance transfer fees. Do you know which card is right for you?

Auto loan

You can use a HELOC to fund a new car purchase, but in most cases an auto loan from First Financial Bank will be a better option. Our auto loans provide terms of up to 72 months, and you can quickly and easily apply online.

Additional resources


The information on this page is accurate as of January 2021 and is subject to change. First Financial Bank is not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving bankatfirst.com. First Financial Bank is not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender.

All loans subject to credit review and approval.

1 Please consult your tax advisor.

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First Financial Bank is not affiliated with any third-party websites. Any reference to any person, organization, activity, product, and/or services does not constitute or imply an endorsement. First Financial Bank is not responsible for the content or security of any linked web page.