Thinking About a Personal Loan? Here’s Why a Home Equity Agreement Might Be a Better Option

By Tommy Barnes ◦ November 12, 2025

When money gets tight or big expenses pop up, a personal loan can seem like an easy solution. The process is quick, the funds arrive fast, and you can use the money however you want.

But personal loans also come with something many people overlook: high interest rates, short repayment terms, and monthly payments that start almost immediately.

If you’re a homeowner with equity, there may be a smarter, flexible way to access cash without another bill to pay each month. It’s called a Home Equity Agreement (HEA), and for the right homeowner, it can be a game-changer.

The Problem Some Have with Personal Loans

Personal loans can work well in certain situations, but they’re not always the most cost-effective way to borrow.

Most personal loan rates are still sitting well above 10%, and they can climb much higher for borrowers with average or fair credit. On top of that, repayment terms are often just a few years long, which can make monthly payments feel tight.

Even a modest $20,000 loan at 12% interest can mean paying nearly $450 a month for five years. That’s a heavy burden when budgets are already stretched.

Add in origination fees and credit score requirements, and personal loans can quickly become more expensive than expected.

A Different Way to Tap into Cash

A Home Equity Agreement (HEA) takes a completely different approach. Instead of borrowing money, you’re working with an HEA provider (like Unlock.com) who gives you a lump sum today in exchange for a share of your home’s future value.

There are no monthly payments, and you stay in control of your home, keep your existing mortgage, and can use the funds however you choose.

Many homeowners use an HEA to:

Pay off high-interest debt
Fund home improvements
Build an emergency cushion

Why Some Homeowners Prefer an HEA Over a Personal Loan

✅ No monthly payments: You get the cash you need now without adding another bill to your budget

✅ No age or income requirements: Approval is based primarily on your home’s equity and market value

✅ Lower credit scores are accepted: Many HEA providers work with scores in the 500–600 range

✅ Larger funding amounts: You can often access more cash than a typical personal loan allows (up to $500,000)

With an HEA, you can make progress toward your financial goals without juggling another repayment schedule.

What to Keep in Mind

A Home Equity Agreement isn’t for everyone. Because you’re exchanging a portion of your home’s future value, the amount owed when you sell or refinance depends on how much your property is worth at that future date.

For many, though, the trade-off is worth it. You get access depends on the future value of your home.

Keep your financial breathing room, and avoid the high interest and stress that come with traditional borrowing.

The Bottom Line

If you own your home and need access to cash, a personal loan might feel like the easiest choice, but it often comes with high costs and immediate repayment.

A Home Equity Agreement may give you the flexibility to use your home’s value without strict credit requirements.

Unlock, one of the leading providers of Home Equity Agreements, makes it simple to see how much cash you could qualify for based on your home’s value. There’s no impact on your credit just to check, and you’ll instantly see how much of your equity could be working for you.

Before signing up for a high-interest loan, see if you qualify with Unlock. It only takes a few minutes and could save you years of unnecessary payments.

Unlock Agreements are provided exclusively by Unlock Partnership Solutions Inc., Unlock Partnership Solutions AO1 Inc., Unlock Partnership Solutions AO2 Inc., Unlock Home Equity Solutions Inc. dba “Unlock” and/or “Unlock Technologies”, and Unlock Homeownership Solutions Inc., all of which are wholly-owned subsidiaries of Unlock Technologies, Inc. (collectively, “Unlock”).

The applicable Unlock entity enters into the Unlock Agreement directly with consumers and does not act as an agent or broker on behalf of any third-party. No agency relationship shall be formed between any Unlock entity and a consumer pursuant to or in connection with an Unlock Agreement. All Rights Reserved. Other terms and restrictions apply.

Each home equity agreement (HEA) is subject to additional individual underwriting review.
All transactions are subject to verification of your credit (with a soft credit pull), identity, property value, home insurance, title, and outstanding property liens. Other verifications may be required.
Unlock may also require HEA proceeds to be used to clear any pre-existing liens as a condition to close.
The following limitations shall apply in all cases: no bankruptcy, foreclosure action, short sale, or deed in lieu within the previous five years; no 90-day delinquencies on any mortgage within the prior 24 months.
In most cases, Unlock must be in no greater than 2nd lien position and the property must be clear of any liens deemed unacceptable by Unlock in its discretion.
A minimum HEA amount of $15,000 is required on all transactions.
Property condition rating, as described in the Uniform Appraisal Dataset (UAD), must be at least C4 or better and properties for which comparable valuations, in the discretion of Unlock, do not exist may be ineligible.
Not available in all states.
To secure the performance of your obligations under HEA, Unlock will place a lien on your property in the form of either a “performance deed of trust” or a “performance mortgage” depending upon which state the property is located. The lien is released when you settle your HEA.
Unlock may charge an origination fee of up to the lower of a 4.9% of the transaction amount, subject to applicable state law limitations. You will also be responsible for third party closing costs, which may include appraisal, title, and government fees.
The home equity agreement term is 10 years.
The timeline to funding of approved HEAs may vary depending on when the homeowner submits a completed application and all supplemental documents are received and verified.
Please contact us for more information at hello@unlock.com.
For additional information please review the Unlock Product Guide.