FAQ About Heritage Loans in Sacramento

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What can I use my Heritage loan funds for?

Some loans are built for certain purchases, such as a home or vehicle. But personal loan and home equity loan funds may be used in a range of ways, including:

• Home improvements projects and remodeling
• Debt consolidation of high-interest credit cards and loans
• Family vacations and weddings
• Medical, vision, and dental expenses
• Car repairs and appliance replacement
• Business development

What rate will I get for my Heritage loan?

The rate you get will depend on your chosen loan product. For example, home equity loans and auto loans tend to come with lower rates than personal loans because they are secured by collateral.

Other factors that affect your rates include:

• Your credit score (higher scores get lower rates)
• Your chosen loan term (shorter terms get lower rates)
• The age of your vehicle in the case of an auto loan
• Your loan-to-value (LTV), which is how much you're borrowing compared to the value of the asset
• Your down payment if relevant for your loan type

How is a personal line of credit different from a personal loan?

A personal loan is an installment loan that gives you a lump sum payment.

• You are given all the funds at once.
• You make equal monthly payments until the loan is paid off in full.
• You get a fixed rate based on your loan term and financial situation.

 In contrast, a personal line of credit is a revolving source of credit, like a credit card.

• You can use as much or as little of the funds as you want at any given time.
• You pay down your balance on a schedule that suits you, and then you can use the funds again.
• If you don't carry a balance, you don't pay any interest.

How is interest calculated on a personal line of credit?

Just like a credit card, interest is calculated on your balance at the end of your monthly cycle.=

• You pay interest on the funds you use, not on your entire credit limit.
• If you don't use any funds, you won't pay any interest.
• Your rate is based on your credit score and financial situation.

Can I use a Heritage loan to build my credit score?

Yes, a personal loan and most other forms of financing allow you to show you can borrow and repay funds on time.

• As you continue to make your payments on time each month, your credit score will improve.
• For best results, you should aim to use less than 30% of your available credit across all your accounts, such as a personal line of credit or credit card.
• Using less than 30% of your available credit will boost your debt-to-credit (DTI) ratio, also known as your credit utilization rate.
• It's also a good idea to have a mix of credit sources, such as an auto loan, a personal loan, and a credit card.

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