What is the difference between a Home Equity Line of Credit and a Home Equity Loan?
The biggest difference between a Home Equity Line of Credit and a Home Equity Loan deals with the ability to borrow funds. A Home Equity Line of Credit is called open-ended credit. This means that customers can borrow back what they pay off the principal of the loan without having to rewrite the loan as customers need money. A Home Equity Loan (often called a second mortgage) is closed-ended, which means customers cannot borrow back any amount paid off the principal unless the loan is refinanced.
