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6 Ways to Use First Republic Personal Line of Credit

Yogesh Mehra, Vice President, Eagle Marketing, First Republic Bank
August 19, 2021

There’s a wide array of financial products on the market today that promise to help you handle debt or lower monthly payments. Determining which one is right for your specific needs is an integral step in achieving your personal financial goals.

While you may be familiar with some of the more common financial products, you might not have considered how taking out a Personal Line of Credit from First Republic can be useful.

In this article, we will focus on how First Republic’s Personal Line of Credit can help you in achieving long-term financial stability by refinancing student loans, covering minor home improvements, buying a car and more — all at one low fixed rate.

First Republic’s Personal Line of Credit – access funds with fixed rates from 2.25% APR (with discounts).

1. Refinance student loans

How it helps: A Personal Line of Credit allows you to borrow money to pay off any student loans you might be carrying from multiple lenders.

The benefit of refinancing student loans with a Personal Line of Credit is twofold. For one, you can combine your student loan payments into one easy monthly payment to First Republic Bank. Plus, you get an opportunity to save more in the long term with our low fixed-rate options from 2.25% - 3.50% APR with discounts.

Please note, First Republic Personal Line of Credit is not a student loan and you may be permanently giving up the benefits of a student loan such as certain deferment, forbearance, and forgiveness options. Please consider this as you make a decision to refinance student loans, and talk to a banker if you have any questions.

Currently, all payments for certain types of federal student loans are suspended until January 31, 2022, per an executive order by the president. Interest will not accrue during this time period.

2. Cover minor home improvements

How it helps: Whether you bought a fixer-upper or not, most homeowners need to pay for repairs or upgrades at some point. It is wise to explore the financing option that makes the most sense for the scope (length of time, total anticipated cost, draw period) of your home improvement project.

A minor home improvement, a mid-range remodel of a kitchen for example, may involve refinishing the flooring, re-plastering and painting, plus upgrades in fixtures, appliances or materials. In such cases, a Personal Line of Credit can be a good financing option.

First Republic’s Personal Line of Credit consists of a two-year draw period, during which you can make interest-only payments, followed by a Repayment Period. The Repayment Period is the set time where loan payments shift from a non-amortizing payment to a fully amortizing payment.

When it comes to financing a major home improvement or remodeling project, it is better to go with a product that offers a longer draw period and higher available balance.

Renovating your entire home, for example, would be a major home improvement, as it may entail demolition, replacing walls, installing new piping, and wiring systems, moving doorways and installing brand-new flooring. Depending on your location, you may also need the services of a professional design firm to apply for permits, navigate complex approval systems and meet insurance coverage requirements. For such major home improvements, a HELOC or construction loan would be a better financial solution.

Learn more about how a Personal Line of Credit compares to a HELOC.

3. Buy or refinance a car

How it helps: Aside from a house, your car is probably one of the more expensive things you’ll purchase, so it's important to get the financing right.

Personal Line of Credit can be used to purchase or refinance electric vehicles (EV), hybrids, recreational vehicles (RV) and more, without adding First Republic Bank as a lienholder on the vehicle's title.

Also, Personal Line of Credit is a flexible loan where the money is available for you during the two-year, interest only draw period. If you are looking to purchase a car using our financing option (versus refinancing an auto loan), we suggest you obtain the Personal Line of Credit first, before making the final purchase at the dealership.

Learn more about buying or refinancing a car with a Personal Line of Credit.

4. Plan for your family’s future

How it helps: Family planning can cover a variety of things, from fertility treatments and your child’s education costs to elderly care of aging family members. However, overall costs are often significant, and the timing of needs and personal finances may not align.

For instance, fertility treatments can run the gamut, depending on which route you decide to take, so the total final costs can be difficult to predict. As another example, you might be committed to providing for your child’s K-12 private education, but you may not want to liquidate your investments to pay for tuition or might plan to use your variable compensation to cover the cost. Please note, a Personal Line of Credit cannot be used for direct payment of post-secondary educational expenses.

With flexible access to funds, a Personal Line of Credit can support you in such scenarios. In addition, you can enjoy the peace of mind of only paying interest on what you draw for during the first two years.

Learn more about how a Personal Line of Credit can be used to finance family related expenses.

5. Pay your current taxes

How it helps: As tax season comes around, a tax bill may be a significant drain on your cash on hand. For those looking to avail the long-term payment plan to spread out their payments, you will have to deal with setup fees as well.

This is where First Republic’s Personal Line of Credit can help. With fixed rates as low as 2.25% APR with discounts, a Personal Line of Credit can be a great cash management tool during the tax season.

In addition to low fixed rates, the two-year interest-only draw period is a unique benefit of First Republic’s Personal Line of Credit. During the two-year draw period, you’ll pay interest only on what you draw for, and repay the full loan with term options that best suit your financial goals.

Connect with a banker to see how a Personal Line of Credit can be used to manage your taxes and more.

6. Pay for medical or dental procedures

How it helps: Even with health insurance, out-of-pocket costs related to healthcare — from dental procedures to emergency room visits — can be substantial. All these necessary expenses can easily disrupt your monthly cash flow or even affect your savings.

A Personal Line of Credit can cover these upfront costs without derailing your other financial goals. With the flexibility to choose the rate and term options that best suit your needs, a Personal Line of Credit can be ideal for both planned and unplanned medical expenses. Besides, you won’t be charged origination, maintenance or prepayment fees – ever.

Dream big and choose wisely

There is no one-size-fits-all answer for the myriad of financial needs, but it helps to have options.

A Personal Line of Credit helps in the situations listed above (and many others), acting as a liquidity safeguard that can help you secure financing for your future goals, now.

If you’re interested in learning more about how a Personal Line of Credit might help you meet your own specific financial needs, an expert at First Republic Bank is waiting to help.

First Republic’s Personal Line of Credit – access funds with fixed rates from 2.25% APR (with discounts).

1. Annual Percentage Rate. Rates effective as of 06/15/2020 and are subject to change.

Borrower must open a First Republic ATM Rebate Checking account (“Account”). Terms and conditions apply to the Account. If the Account is closed, the rate will increase by 5.00%. Rates shown include relationship-based pricing adjustments of: 1) 2.00% for maintaining automatic payments and direct deposit with the Account, 2) 0.50% for depositing and maintaining a deposit balance of at least 10% of the approved loan amount into the Account, and 3) an additional 0.25% for depositing and maintaining a deposit balance of at least 20% of the approved loan amount into the Account.

Personal Line of Credit consists of a two-year, interest-only, revolving draw period followed by a fully amortizing repayment period of the remainder of the term. Draws are not permitted during the repayment period. Full terms of 7, 10 and 15 years available.

This product can only be used for personal, family or household purposes. It cannot be used for the following (among other prohibitions): to refinance or pay any First Republic loans or lines of credit, to purchase securities or investment products (including margin stock), for speculative purposes, for business or commercial uses, or for the direct payment of post-secondary educational expenses. This product cannot be used to pay off credit card debt at origination.

Personal Line of Credit minimum is $60,000; maximum is the lesser of $350,000 or debt to be repaid at origination plus $100,000. If no debt to be repaid at origination, the maximum loan amount is $100,000. Line of credit cannot be fully drawn at origination.

The terms of this product may differ from terms of your current loan(s) that are being paid off, including but not limited to student loans. By repaying such loans, you may permanently be giving up tax and repayment benefits, including forbearance, deferment and forgiveness, and you may not be able to re-obtain such benefits if this loan is refinanced with another lender in the future.

Contact your legal, tax and financial advisors for advice on deciding whether this is the right product for you. Terms and conditions apply.

Product is not available in all markets. For a complete list of locations, visit firstrepublic.com/locations. Applicants must meet a First Republic banker to open account. This is not a commitment to lend; all lending is subject to First Republic’s underwriting standards. Applicants should discuss line of credit terms, conditions and account details with their banker.

The strategies mentioned in this article may have tax and legal consequences; therefore, you should consult your own attorneys and/or tax advisors to understand the tax and legal consequences of any strategies mentioned in this document.

This information is governed by our Terms and Conditions of use.