Minor Home Improvement Financing with a Personal Line of Credit

FAQs when financing
minor home improvements.

• What is the difference between financing minor and major home improvements?

  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.

  As for 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.

• Can I use a Personal Line of Credit for major home renovation projects or real estate investments?

  Personal Line of Credit offers a two-year, interest-only, revolving draw period with a loan size between $70,000- $350,000^[3].

  It may not be the ideal financial solution for home renovation projects with long project timelines or a significant upfront investment.

  Additionally, a Personal Line of Credit cannot be used for any real estate investments.

  A home equity line of credit, or HELOC on the other hand, is better suited for both larger home renovation projects and real estate investments.

• What is the difference between a personal line of credit and a HELOC?

  A HELOC or home equity line of credit is a loan based on your home’s value beyond what you owe on it; by definition, it is “secured” with an asset — your home, which you’ll be required to put up as collateral.

  A personal line of credit, on the other hand, is unsecured, which means that qualification depends on your income, expenses and credit history, including credit reports and credit scores.

  Learn more about the difference between a HELOC and a personal line of credit.

• My home improvement project is going to cost more than $100,000. What should I do?

  If your anticipated budget for your home improvement project exceeds $100,000, a HELOC or construction loan may be better suited for your needs.

• Can I use a Personal Line of Credit beyond minor home improvements?

  In addition to refinancing student loans, a Personal Line of Credit can used to:

  -  Refinance student loans
  -  Buy or refinance a car
  -  Pay for your family's future
  -  Pay for medical or dental procedures
  -  Other: Contact a First Republic banker to learn more about the other ways of using a Personal Line of Credit.

  Please note, only debts that appear on your consumer credit report or student loans can be repaid at origination.

  The Personal Line of Credit cannot be used (among other prohibitions) to refinance or pay any First Republic loans or lines of credit, to purchase securities or investment products, for speculative purposes, for business or commercial uses, or for the direct payment of post-secondary educational expenses. This product cannot be used to payoff credit card debt at origination.

  Note: Currently, all payments for certain types of federal student loans are suspended potentially until June 30, 2023, per an executive order by the President. Interest will not accrue during this time period. For more information, please visit ed.gov.

• How are my loan payments structured?

  The Personal Line of Credit offers a two-year draw period with interest-only payments, followed by a repayment period (sometimes referred to as the amortization period) based on your loan term. During the two-year draw period, you will pay interest only on what you draw and you are able to make principal payments at any time (with no origination or prepayment fees). Principal amounts repaid during the two-year draw period are available to be borrowed again. During the repayment period, you make principal and interest payments throughout the remainder of your loan term.

• What are the requirements to receive the lowest listed rates?
  • You must have a First Republic ATM Rebate Checking account ("Account") with auto-debit for your Personal Line of Credit payments and direct deposit of your main source of income for a 2% relationship-based pricing discount. If the Account is closed, the rate will increase by 5.00%.
  • The lowest available rate includes a relationship-based pricing adjustment for maintaining 20% of the approved amount in your ATM Rebate Checking account with the option to deposit up to half of that 20% into an Eagle Invest account.
  • If you do not opt in to any relationship-based pricing adjustments, a minimum $500 is required to open an ATM Rebate Checking account. A monthly service fee (currently $25) will apply if a $3,500 required minimum average balance is not maintained. 
• I have more questions about Personal Line of Credit and how to use it.

  Get answers to all your product specific questions here.

  For FAQs around how to use a Personal Line of Credit, follow the links below:

  - Refinance student loans
  - Buy or refinance a car
  - Plan for your family's future
  - Pay for medical or dental procedures
  - Other: Contact a First Republic banker to learn more about the other ways of using a Personal Line of Credit.