What are some of the cheapest ways to borrow money after the Fed rate cut?

Borrowing with a HELOC or home equity loan makes sense now that the Fed's cutting rates again. witthaya_prasongsin/Witthaya Prasongsin/Getty Images

Even the most optimistic of borrowers would have to admit that recent years have been tough. Thanks to a mix of high inflation and high interest rates designed to combat it, the costs of borrowing surged and there weren't many products that were immune.

Mortgage rates hit their highest level since 2000 in 2023. Credit card interest rates rose to a record 23%. Even personal loans, which offered borrowers an effective way to borrow, at the start of the decade, jumped into the double digits.

Now, however, there's reason to be cautiously optimistic about rates and borrowing expenses. Not only did the Federal Reserve issue three interest rate cuts in the final months of 2024, combining for a full percentage point reduction, they issued another this week. Two others, for October and December, respectively, are also in play. 

This encouraging news may lead some borrowers to wonder about the inexpensive ways to borrow money now. While rates on most products are still not as low as they were in 2020 and 2021, the trend is an encouraging one. What are some of the cheapest ways to borrow money now, specifically, considering the latest Fed rate cut? Below, we'll explore three worth knowing more about.

Start by seeing how low your current home equity loan rate offers are here.

What are some of the cheapest ways to borrow money after the Fed rate cut?

Here are three of the least expensive ways to borrow money now, in the cooling interest rate climate of September 2025:

A home equity line of credit (HELOC)

A HELOC, which performs as a revolving line of credit utilizing your home equity, isn't just the cheapest way to borrow home equity, it's one of the least expensive ways to borrow money in total. With an average rate of just 8.05% right now, a HELOC is more affordable than a home equity loan (at 8.28%) and a personal loan (12.39%). 

And with credit card rates just under a recent record of 23%, a HELOC is almost three times less expensive than swiping a credit card. Plus, thanks to its variable interest rate, it will become even more affordable if rate cuts are issued in the future. Just remember one of the primary reasons why it's so cheap: your home serves as collateral. Have a plan, then, for repayments tied to today's new, lower rates as well as some potentially higher ones just to be safe.

Learn more about borrowing with a HELOC here.

A home equity loan

Home equity loans are marginally more expensive than HELOCs, but they come with much less stress and management thanks to a fixed interest rate. Repayments here can be made with ease, and they're easy to calculate before getting started. And you don't need to be concerned about missing out on significant rate adjustments downward in the future, as you can always refinance the loan into a new one with a better rate – or into a HELOC if you prefer to have a product that's continuously responsive to a cooler rate climate. 

That said, your home functions as collateral in this scenario as well, and repayments will be expected immediately (unlike a HELOC, which has a later repayment period), so go into the process well-informed to better ensure borrowing success.

A personal loan

Sure, personal loan rates are no longer in the single digits for qualified borrowers as they once were, but they're still cheaper than credit cards. And, unlike the other two options on this list, they won't require collateral or concerns over your homeownership, should you ultimately find yourself unable to repay your loan in full. Like home equity loans and HELOCs, however, if you take the time to shop around and, ultimately, apply with a clean credit history and good credit score, you may be able to find a product with a below-average rate.

Compare your top personal loan offers here today.

The bottom line

HELOCs, home equity loans and personal loans all offer borrowers cost-effective ways to access extra financing right now. And, with a HELOC in particular, that could become even more affordable if the interest rate climate continues to cool. Research all three carefully, then, to determine not only which is most appropriate for your current circumstances but which will also better serve you in the future should current rate-cutting trends continue.