Whether you’re considering a home equity loan or a HELOC, prequalifying and getting preapproved can help you find the right option. Prequalification gives you a quick estimate of what you might qualify for, while preapproval takes a deeper look at your finances to offer more concrete terms.
Top lenders streamline the prequalification process. In this guide, we’ll break down how both steps work and how to choose the right lender for your situation.
Aven typically requires a credit score of 720 or higher. If you’re below that, consider LendingTree or other alternatives to avoid a hard credit check with a low chance of approval.
Table of Contents
- The best lenders to prequalify for a home equity loan or HELOC
- What does it mean to prequalify for a home equity loan or HELOC?
- How do you prequalify for a home equity loan or HELOC?
- How to get preapproved for a HELOC or home equity loan
- Can you be denied a HELOC or home equity loan after prequalification or preapproval?
- Preapproval or prequalification: Which is better?
- FAQ
The best lenders to prequalify for a home equity loan or HELOC
Finding a home equity lender that offers prequalification or preapproval can help you compare your options and plan your borrowing with confidence. The lenders below make it easy to explore your eligibility for a HELOC or home equity loan, so you can choose the right product for your needs.
Aven
Why it’s one of the best to prequalify with
Aven simplifies prequalification by using a fast online system that provides potential terms without a hard credit inquiry. For preapproval, Aven builds on this process by verifying your financial information and conducting a hard credit check.
With Aven, you can expect a streamlined experience with clear updates on your application status. This makes it easy to move from prequalification to preapproval with minimal friction.
Loan details
| Rates (APR) | 6.99% – 15.49% |
| Loan amounts | $5,000 – $400,000 ($100,000) |
| Repayment terms | Draw: 5 years / Repayment: 5, 10, 15, or 30 years |
| Min. credit score | 640 (*720 and above strongly preferred) |
| Funding time | As little as 3 days after signing |
| Availability | Available in 32 states* |
LendingTree
Why it’s one of the best to prequalify with
LendingTree’s platform enables prequalification across multiple lenders without hurting your credit score. Preapproval processes will vary depending on the lender you choose through LendingTree.
However, the platform offers resources to guide borrowers through lender-specific preapproval steps, including document requirements and timeline expectations. This flexibility and variety make LendingTree an excellent option to explore preapproval options with multiple lenders.
Loan details
| Rates (APR) | Starting at 6.99% |
| Loan amounts | $10,000 – $2 million |
| Repayment terms | 5 – 30 years |
| Availability | All 50 states |
What does it mean to prequalify for a home equity loan or HELOC?
As you work toward getting a home equity loan or HELOC, prequalification and preapproval are two important steps you’ll likely take. You might see the terms used interchangeably, but they aren’t the same. Here’s a closer look at how they differ.
Prequalification
Prequalification happens early in the process of getting a HELOC or home equity. To prequalify, you provide basic financial information to a lender or lender marketplace and find out how much you might qualify to borrow and at what terms.
You can prequalify online with many lenders in just a few minutes. It’s an easy, informal process that uses self-reported information and a soft credit check to decide. The loan offers aren’t set in stone; they’re rough estimates based on the information you provided.
What is a “soft pull” for a HELOC or home equity loan?
A soft pull is a preliminary credit check lenders use during prequalification that doesn’t affect your credit score. It gives lenders a general sense of your creditworthiness without triggering a hard inquiry, so you can explore your options with minimal risk.
The purpose of prequalification is to see whether you qualify for a HELOC or home equity loan with favorable terms. This helps you narrow your options and determine which lenders to consider without committing to one particular offer.
Learn more about prequalifying with the top home equity loan and HELOC lenders.
Preapproval
Preapproval is more in-depth than prequalification and is essentially the same as applying for funding.
This step requires you to submit documentation instead of relying on self-reported information. For example, you’ll likely need to provide paperwork that shows proof of identity, income, assets, liabilities, and home value—usually in the form of a property appraisal.
You’ll also agree to a hard credit check as part of the financial review. Because it’s a more involved process, preapproval can take anywhere from a couple of business days to several weeks, depending on the lender and the complexity of your finances.
But in the end, the effort is worth it; you’ll have a conditional approval letter outlining the exact loan amount, interest rate, and repayment terms you qualify for.
If your financial situation changes, the terms are no longer valid; you’ll need to apply again and submit updated documentation.
Here’s how the prequalification and preapproval processes compare:
| Prequalification | Preapproval |
| Quick, often fully digital process | More in-depth, formal application |
| Uses a soft credit check (no impact on your score) | Requires a hard credit check |
| Provides an estimate of how much you might qualify for | Confirms eligibility with more precise loan terms |
| Minimal information required | Requires income, assets, and document verification |
How do you prequalify for a home equity loan or HELOC?
For most lenders, prequalification is a quick online process that takes 15 minutes or less. You’ll provide basic details about yourself, your finances, and your home to see what you might qualify for—without committing to a loan.
Here’s how it typically works:
- Visit a lender or loan marketplace website
- Enter basic information, such as your desired loan amount, contact details, income, employment, debts, estimated home value, and remaining mortgage balance
- Consent to a soft credit check (this won’t impact your credit score)
- Review your estimated loan amount, interest rate, and repayment terms
There’s little difference between prequalifying for a HELOC vs. a home equity loan—the process and requirements are largely the same. Lenders evaluate a few key factors to gauge your risk as a borrower and determine how much you can reasonably afford:
- Credit score: Shows how reliably you’ve managed debt in the past. A score of 620 or higher is often recommended.
- Debt-to-income ratio (DTI): Helps lenders assess whether you can take on additional monthly payments. Most lenders prefer a DTI of 43% or lower for a home equity loan or 50% maximum for a HELOC.
- Income and employment history: This confirms you have stable earnings to repay the loan
- Home equity: This ensures there’s enough value in your home to secure the loan or credit line. Usually, 20% equity or more is required.
Read our complete guide to qualifying for a HELOC or home equity loan
How to get preapproved for a HELOC or home equity loan
Unlike prequalification—which uses a soft credit check—preapproval requires a hard credit pull and a full review of your finances. That’s what allows lenders to give you real, personalized loan terms instead of estimates.
If you’re comfortable moving forward (and okay with a hard inquiry on your credit), here’s how to get preapproved:
- Choose a lender based on your research or prequalified offers
- Complete a full application with your personal, financial, and property details
- Submit documentation, including proof of income, assets, debts, and identity
- Authorize a hard credit check to review your credit history
- Complete a home valuation, either through an appraisal or an automated valuation model (AVM)
- Wait for review, which can take a few days to a couple of weeks
Some lenders, like Figure and Aven, use automated valuation models instead of in-person appraisals, which can speed up the process. Others may require a full appraisal depending on the lender and your situation.
If approved, you’ll receive a conditional preapproval with your loan amount, rate, and terms—giving you a clear picture of what you can move forward with.
If my clients are pursuing preapproval for a HELOC or home equity loan, we first discuss their home marketplace conditions and establish realistic expectations with them. If the market is expected to go down, I may recommend that they delay taking out the loan and explore other avenues of funding their goal or using their cash reserves (if available) to then later replenish with the HELOC or home equity loan when their home marketplace improves.
Erin Kinkade, CFP®
Can you be denied a HELOC or home equity loan after prequalification or preapproval?
Yes—neither prequalification nor preapproval is a guarantee of final approval. Prequalification is based on limited, self-reported information and a soft credit check, while preapproval involves a deeper review—but both can still change before closing.
You can be denied later in the process if something doesn’t hold up under verification or if your financial situation changes. Common reasons include:
- Your credit score drops before or during the hard credit check
- Your income or employment can’t be verified or doesn’t meet requirements
- Your debt-to-income ratio is too high once all debts are confirmed
- Your home appraisal comes in lower than expected, reducing your available equity
- You don’t have enough equity to secure the loan or line of credit
To improve your chances, avoid taking on new debt, keep your credit stable, and make sure the information you provide early on is accurate and consistent throughout the process.
Home equity loan or HELOC preapproval or prequalification: Which is better?
It depends on where you are in the process—but for most borrowers, starting with prequalification is the smarter move.
Prequalification is quick, low-risk, and doesn’t impact your credit score. It’s the best way to explore your options, compare lenders, and get a general idea of how much you might qualify for before committing to anything.
Preapproval, on the other hand, is the better choice once you’re ready to move forward with a specific lender. It requires more time, documentation, and a hard credit check, but it gives you more accurate loan terms and shows the lender you’re serious about borrowing.
In most cases, the ideal approach is to prequalify with multiple lenders first, then move forward with preapproval from the one that offers the best terms for your needs.
When comparing prequalified or preapproved offers, beyond just the interest rate, it’s important to consider the amount you’ll need, the LTV, and the maximum borrowing amount. Also, look at the interest rate structure (variable versus fixed), additional fees or costs, and repayment terms to ensure it fits your budget. Finally, check whether the loan or line of credit has a prepayment penalty.
Erin Kinkade, CFP®
FAQ
Can the terms of my HELOC or home equity loan change after I prequalify?
Yes, the terms of your HELOC or home equity loan can change after prequalifying. Prequalification is based on a preliminary review of your finances, and lenders use estimated information.
Once you submit a full application, the lender will verify your credit, income, and property value, which could result in adjustments to your loan terms, such as the interest rate, loan amount, or repayment period.
Can the terms of my HELOC or home equity loan change after I get preapproved?
Yes, even after preapproval, the terms of your HELOC or home equity loan can change. Preapproval is more detailed than prequalification but is still conditional. If your financial situation changes significantly (e.g., job loss or increased debt) or the property’s appraised value is lower than expected, the lender may revise your terms or even withdraw the approval.
What should I do after prequalifying for a HELOC or home equity loan?
After prequalifying, review the terms provided, gather the necessary documentation, compare offers from other lenders, and avoid major financial changes that could affect your approval.
What should I do after being preapproved for a HELOC or home equity loan?
After preapproval, consider locking in your rate if available, complete your application by submitting all required documents, schedule the property appraisal if needed, avoid significant financial changes, and review the closing disclosure carefully before finalizing the loan.
How we selected the best home loans and HELOCs to prequalify with
Since 2018, LendEDU has evaluated home equity companies to help readers find the best home equity loans and HELOCs. Our latest analysis reviewed 850 data points from 34 lenders and financial institutions, with 25 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.
These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.
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About our contributors
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Written by Christi GorbettChristi Gorbett is a finance writer with a master’s degree in English and years of experience. She specializes in creating financial content that simplifies complex topics, making them easier for a wide audience to understand.
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Edited by Amanda HankelAmanda Hankel is a managing editor at LendEDU. She has more than seven years of experience covering various finance-related topics and has worked for more than 15 years overall in writing, editing, and publishing.