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Citizens Bank Home Equity Loans Review
By Joan Pabón MONEY RESEARCH COLLECTIVE
Not only is Citizens Bank one of our top picks for the best home equity loans, but it is also among the best mortgage servicers in the nation, according to J.D. Power. Its reputation, along with its zero application and origination fees for HELOCs make Citizens Bank an option worth considering — especially for existing checking account customers who may qualify for a rate reduction on their line of credit by setting up autopay.
Table of contents
- Citizens Bank home equity loans overview
- Citizens Bank’s services
- Citizens Bank’s credentials
- Citizens Bank’s accessibility
- Citizens Bank’s customer satisfaction
- Citizens Bank FAQ
- How we evaluated Citizens Bank’s home equity loans
- Summary of Citizens Bank review
Citizens Bank home equity loans overview
Citizens Bank’s consumer banking services include lending, savings, wealth management and small business solutions. Among its home loan products are 15-year and 30-year fixed-rate mortgages, 7/6 adjustable-rate mortgages, refinance loans and new construction loans. As for its home equity loan products, Citizens Bank offers only home equity lines of credit (HELOCs).
- No application, appraisal or prepayment fees
- Checking account customers get a 0.25% rate reduction with autopay
- Low annual fee ($50) is waived the first year
- Apply online, over the phone or at a branch
- No annual fee on credit lines of $25,000 or less
- Doesn't offer home equity loans, only lines of credit
- Only one repayment term (15 years)
HELOC rates through Citizens Bank range from 2.50% APR to 21% APR, with the lowest rates made available to new applicants who already have a checking account with the bank and enroll in autopay, obtain a line of credit of at least $200,000, have a loan-to-value (LTV) ratio under 80%, good credit, and place their Citizen Bank’s HELOC in first lien position. In addition, the lender does not charge appraisal or origination fees and waves its $50 annual fee for the first year.
Although loan amounts are based on the equity in the borrower’s home and their creditworthiness, among other factors, Citizens Bank offers a GoalBuilder™ HELOC that allows borrowers who are still building equity to access between $5,000 and $25,000 in funds.
All HELOCs with Citizens have a 10-year draw period during which you are only required to pay interest on what you have borrowed — although you may still choose to increase the payment amount to repay your debt faster. The 10-year draw period is followed by a repayment period of up to 15 years, during which you do have to make principal and interest payments.
In general, HELOCs offer several advantages over traditional home equity loans, as well as a considerable disadvantage. As HELOCs are a form of revolving credit, much like credit cards, you can continue to tap into your home equity through the draw period. HELOCs also tend to feature lower interest rates and, under the Tax Cuts and Jobs Act, the interest you pay on your line of credit may be tax deductible if you use the funds to make home improvements.
The main drawback of a HELOC is that rates are variable and adjust along with the prime rate. This means that, depending on market conditions, your rate and the interest on your loan may decrease or increase considerably.
Citizens Bank’s services
Citizens Bank offers personal, corporate and small business financing and related services. On the personal finance side, it offers checking and savings accounts, credit cards, auto loans, student loans, retirement and investment accounts, and — compared to other lenders — a small selection of mortgage products.
What’s offered
- Fixed-rate 15-year and 30-year mortgages
- 7yr/6m fully amortizing ARM
- Mortgage refinance
- Construction loans
- Home equity lines of credit
What’s not offered
- Home equity loans
- FHA loans
- VA loans
- USDA loans
- Jumbo loans
- Interest-only mortgages
- Home improvement loans
Citizens Bank’s credentials
Citizens Financial Group, Inc. is a retail and commercial lender headquartered in Providence, Rhode Island. As of 2021, it’s among the 25 largest bank holding companies in the U.S. by total assets. It’s also among the 100 most active SBA 7(a) lenders in the nation.
Citizens Financial Group has been in business since 1828 when it was founded as a subsidiary of the Royal Bank of Scotland Group. It has been accredited by the Better Business Bureau (BBB) since 2019 and holds an A+ rating with the organization — the highest possible rating based on the business’ complaint history with BBB, among other factors.
Licenses and registrations
Citizens Bank’s Home Loan Originators are registered with the Nationwide Mortgage Licensing System and Registry (NMLS). Its NMLS ID is 433960.
Third-party ratings
The following are Citizen Bank’s financial strength ratings, which evidence its ability to meet its long- and short-term financial obligations.
| Citizens Financial Group | |||
| S&P | Moody’s | Fitch Ratings | |
| Long-term issuer credit rating | BBB+ | N/A | BBB+ |
| Short-term issuer credit ratings | A-22 | N/A | F1 |
| Citizens Bank, N.A. | |||
| Long-term issuer credit rating | A- | Baa1 | BBB+ |
| Short-term issuer credit ratings | A-2 | N/A | F1 |
Regulatory or legal actions
No regulatory or legal actions have been taken against Citizens Bank regarding its home equity products. However, in 2020, the Consumer Financial Protection Bureau (CFPB) filed a suit against Citizens Bank for alleged violations of the Truth In Lending Act (TILA) and its amendments.
According to the complaint, Citizens Bank failed to properly manage and respond to credit card disputes by automatically denying billing errors and unauthorized use notices submitted by consumers and then failing to send acknowledgment or denial letters in response to those notices. It also failed to fully refund charges/fees on disputes and claims that merited them.
Lastly, the Bureau claims that Citizens Bank did not provide credit counseling referrals to clients who called the bank’s toll-free number for credit counseling.
Citizens Bank’s accessibility
The bank has 3,300 ATMs and 1,200 branches in 14 states across the Mid-Atlantic, Midwest and New England regions.
Availability
Citizens Bank is licensed to operate in Connecticut, Delaware, Florida, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Vermont, Virginia and Washington, D.C.
You can apply for a home equity line of credit from Citizens Bank online, over the phone or at one of its physical locations. Funding may be issued in as little as 45 days from the date of approval via mobile, online banking or supplied checks.
Contact information
To talk to a Citizens Bank Home Equity Advisor, call 1-800-340-5626. For new loan applications, call 1-800-340-5626. You may also contact a loan specialist for information on other loan products at 1-888-333-1206.
For general inquiries, clients may call the 24/7 customer service center at 1-800-922-9999 or 1-888-805-0200 for assistance in Spanish. In addition, a live chat feature is also available seven days a week on Citizens Bank’s website.
Payments may be made online, through the bank’s mobile app or over the phone at 1-888-805-0200. You may also mail in your payment to the following address:
P.O. Box 42008
Providence, RI 02940-2008
User experience
With Citizens Bank, prospective HELOC borrowers may apply online, over the phone or at a branch. Those who proceed with the online application process will be prompted to complete a profile to get personalized rates and offers. If approved, borrowers may then upload their documents to close on their HELOC.
After closing, borrowers will have a rescission period of 2-4 business days, during which they may cancel their line of credit. The account should be active in just four days after closing, at which point the bank will deposit the funds directly into the borrower’s account or issue a check that may arrive 6-9 days after closing. The entire process may take approximately 45 days from the application’s submission.
Loan payments can be made directly from a Citizens Checking or Savings account or another bank through Online Banking or the bank’s mobile app. Borrowers may also pay over the phone or via postal mail.
Limitations
Citizen Bank’s website is only available in English. Nevertheless, customer support over the phone is available in over 85 languages and there is even a dedicated Spanish line.
Citizens Bank’s customer satisfaction
According to J.D. Power’s latest survey, Citizens Bank has a great reputation for customer satisfaction in the mortgage servicing industry. As a mortgage originator, however, it doesn’t have the best marks.
Customer complaints
Citizens Bank has poor customer reviews (one out of five stars) on sites like Trustpilot and BBB. However, the vast majority of negative reviews are about the bank’s checking and savings accounts.
Some reviewers also complain about difficulties in reaching customer service representatives and disputing incorrect fees/charges. Citizens Bank has not responded to customer reviews on either platform.
Third-party ratings
While Citizens Bank ranked below the national average for customer satisfaction on J.D. Power’s 2021 U.S. Primary Mortgage Organization Satisfaction Study, it ranked fifth in the firm’s survey of primary mortgage servicers.
This last point suggests that customers of Citizens Bank are very satisfied with the lender’s mortgage servicing experience, including customer interaction, communication, orientation, billing and payment and escrow account management.
Citizens Bank FAQ
What are home equity loan requirements through Citizens Bank?
To qualify for a HELOC through Citizens Bank, you will need to provide the following:
- Your personal and employment details
- Your cosigner's details, if applicable
- The estimated value of your home
- The year the property was built and when you purchased it
- Your current mortgage payment, if any
- Your homeowners insurance details
- Your property tax payment information
How much does Citizen Bank's home equity loan cost?
The only home equity products currently available from Citizens Bank are home equity lines of credit. While HELOC rates are more competitive, this type of financing features variable rates that adjust with the prime rate. If the prime rate increases during your draw period, your interest and monthly payment will also increase.
Besides interest, there are other costs associated with funding a home equity line of credit. These costs typically include an application fee, an origination fee and closing costs — which Citizens Bank doesn't charge.
What maximum amount can you borrow on a home equity loan from Citizens Bank?
The maximum amount you can borrow through a Citizens Bank home equity line of credit will depend on several factors, including:
- Your home's value: The value of your home is generally determined through a professional appraisal. The higher the market value of your home, the larger the line of credit you may obtain.
- Your loan-to-value (LTV) ratio: The LTC is the percentage of your home you still owe. An LTV of 80% or less may increase your chances of approval and help you get a larger credit line. To calculate your LTV, divide your outstanding mortgage balance by the current market value of your home and turn the result into a percentage ($170,000/$350,000 = 0.48 or 48% LTV).
- The equity in your home: Home equity refers to the portion of your home you already own; as you make payments on your mortgage, your LTV decreases and your equity increases. Most HELOC lenders allow you to borrow up to 80% of the equity you've built (up to $144,000, using the example above). The more equity you have, the more you can borrow.
Of course, your line of credit amount will also depend on other factors, such as your income, credit score and where you live. Use Citizens Bank's HELOC calculator to get an estimate of loan amount for which you may qualify.
How much equity do you need to qualify for a home equity loan through Citizens Bank?
You generally need to have 15% to 20% equity in your home to qualify for a home equity line of credit, but other factors — such as the value of your home, your credit score and your debt-to-income (DTI) ratio — also come into play. Reach out to a loan specialist for more information.
What is the APR on a home equity loan?
While you first need to complete a loan application to obtain a final rate, Citizen Bank states its HELOC rates range from 2.50% APR to 21% APR. To get the most competitive rate, you would need to meet the following criteria:
- The application must be for a new HELOC
- The line of credit must be for $200,000 or more
- The HELOC must be in the first lien position
- Have an existing Citizens Bank checking account set up with autopay
- Have a loan-to-value (LTV) ratio of 80% or less (varies by location)
- Have good credit
The interest rate on your HELOC will depend on factors such as the line of credit amount you select, your credit score, the market value of your home, your LTV ratio and any outstanding loans secured by your home.
How we evaluated Citizens Bank’s home equity loans
For this review, we looked at Citizens Bank’s home equity loan products, taking into account the lender’s transparency regarding rates, fees, annual charges and closing costs. We also considered the company’s reputation for customer service as evidenced by third-party ratings and online customer reviews and its financial stability and ability to meet financial obligations.
Please note that rates, fees and third-party ratings are subject to change and may have changed since the date of this review.
Summary of Citizens Bank review
Citizens Bank doesn’t offer home equity loans, only home equity lines of credit. And while HELOCs often feature more competitive rates than personal loans or credit cards, rates are generally variable and subject to change based on market conditions. If you cannot keep up with monthly payments, you could risk losing your home.
With that in mind, HELOCs may be best for financially stable borrowers who have ongoing expenses and want to tap into their home equity as needed. Those looking for other types of home equity products or a variety of mortgage types may want to search elsewhere.
HELOCs through Citizens Bank have a 10-year draw period and a 15-year repayment period — no other options are advertised on the lender’s website. This, coupled with its limited service area (14 states) make Citizens Bank an option best suited for existing customers and those who want to avoid application, prepayment and appraisal fees.
Joan is a professional translator, writer and editor with a special interest in personal finance and insurance topics. She has been a contributing author and independent researcher at ConsumersAdvocate.org since 2017 and an editor at Money since 2019. Her work has been featured in MSN Money and Apple News.