Home Equity Loan and HELOC: Key Differences
General information only. This page is not a loan offer, application, approval, or personalized financial advice. Rates, costs, eligibility, and program rules depend on the provider, date, borrower, property, and loan terms.
How the structures differ
A home equity loan generally provides a lump sum secured by home equity. A home equity line of credit is a revolving line that may allow repeated borrowing up to an approved limit during its draw period.
Either product can create an additional payment alongside an existing first mortgage.
Risk and comparison questions
Both products use the home as collateral, so missed payments can put the home at risk. HELOCs commonly have variable rates, and payments can change.
Compare the rate structure, fees, draw and repayment periods, minimum payments, maximum possible payment, and what happens if property value or financial circumstances change.