A home equity loan (HELoan) and a home equity line of credit (HELOC) are both secured by your house. This allows borrowers to access larger sums of money at lower rates.
A HELoan is a bit like a second mortgage: it’s a lump sum loan with a fixed interest rate that you’ll receive in a single cash deposit. You’ll start repaying it immediately through fixed recurring payments.
A HELOC is a line of credit with a variable interest rate that functions similar to a credit card. A HELOC lets you borrow when you need to2 instead of all at once.
For more information on the differences between a HELOC and a HELoan and how to find the best option for you, visit Prosper’s article that spells it all out: “HELOC vs HELoan: What’s the difference?”
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