What are the cheapest borrowing options this November?

After years of elevated interest rates and persistent inflation, borrowers are finally starting to see some light at the end of the tunnel. In September, the Federal Reserve finally conducted its first benchmark rate cut in four years, which resulted in the interest rates on a wide range of loans dipping shortly thereafter. That, coupled with cooling inflation figures, is helping to create a more favorable environment for those seeking to borrow money.

However, much of the relief provided by the Fed's rate cut proved to be short-lived. Days after the Fed rate cut was announced, the interest rates on certain borrowing products, like mortgage loans, began to inch upward once again. And while the current rate environment still shows improvement compared to recent peaks, we're still far from the ultra-low rates seen in 2020 and 2021. This has left many potential borrowers searching for the most cost-effective ways to access the funds they need.

But while today's rate environment may be a bit unusual, the good news is that there are several borrowing options worth considering this November. 

Compare today's best home equity rates online now.

What are the cheapest borrowing options this November?

Here are three of the most cost-effective borrowing options available right now.

Home equity loans

If you're a homeowner with considerable home equity, a home equity loan is one of the most affordable borrowing options available to you in today's market. Right now, home equity loan rates are averaging 8.35%, making this type of borrowing an attractive option for those who can leverage their home's value to secure funds. 

And there are a lot of homeowners who can leverage their home's values to borrow right now. Home values have steadily increased in most markets over the past few years, and the average homeowner currently has about $300,000 in home equity. That high amount of equity allows them to access a substantial amount of funds at a low rate, whether the goal is to pay off high-interest debt, finance home improvement or cover other large expenses. 

But today's average rates aren't the only benefit. Home equity loans also offer additional peace of mind, as they provide the certainty of a fixed interest rate over the life of the loan. This fixed-rate structure means homeowners who take advantage of these loans won't have to worry about the impact of any future rate hikes that occur, as their rate will stay the same unless they opt to refinance their loan at some point.

Learn about your top home equity borrowing options here.

HELOCs

Another favorable option for borrowers who have equity in their homes is a home equity line of credit (HELOC). HELOC rates are currently averaging 8.69%, which is slightly higher than the rates for home equity loans — but unlike a home equity loan, a HELOC offers a revolving line of credit that can be borrowed against multiple times (up to the credit limit). This flexibility can be helpful for those who prefer accessing funds as needed and makes a HELOC ideal for ongoing expenses like renovations or educational costs.

HELOCs also come with variable rates, which means they can and do automatically fluctuate along with broader market conditions. While this might seem risky, the Fed's recent rate cut and the likelihood of future cuts could make HELOCs even more affordable in the coming months. Should the Federal Reserve follow through with expected rate cuts, the cost of borrowing on a HELOC could decrease, providing greater savings over time. So, for borrowers who are comfortable with variable rates and are seeking flexibility in their borrowing, a HELOC is an affordable option worth considering this November.

Personal loans

For those who do not own a home or prefer not to tap into their home equity, personal loans remain a practical option. While personal loan rates are generally higher than those for home equity products, averaging about 12.43% currently, the rates on these loans are still significantly lower than credit card interest rates, which exceed 23% on average now. 

And, a personal loan could be even more affordable than that. For example, the average rates for applicants with a score of 720 or higher range between 10.73% to 12.50% currently. Personal loans do not require collateral, either, meaning borrowers can avoid the risk of putting up assets, such as a home, to secure their loan. Personal loans are also typically approved more quickly than other forms of credit, making them a good option for those needing immediate access to funds.

Find out more about your personal loan options now.

The bottom line

If you need to borrow money right now, you're in luck. While rates are still higher than they were in 2020 and 2021, the current rate environment offers several affordable borrowing options. Homeowners with substantial home equity may find that home equity loans and HELOCs provide the lowest borrowing costs, with the added security of fixed rates for home equity loans and potential future rate reductions for HELOCs. For non-homeowners or those who prefer unsecured borrowing, personal loans continue to be a solid alternative, especially for those with strong credit scores.