What s the difference between a home equity line of credit and a home equity loan?
With a HELOC, you are qualified for a maximum credit line that you can borrow from on a revolving basis, like a credit card. The interest rate on a HELOC is typically an adjustable-rate that fluctuates with the pre-determined index, usually the prime rate published in major daily newspapers, plus the margin. Your monthly payment will change as your loan balance and interest rates change, depending on how much you ve borrowed or drawn on the line. The HEIL offers a fixed interest rate over the life of the loan. With this type of loan, you are approved for a specific amount of cash that you receive in one lump sum. The monthly payments are made on a schedule, like any installment loan such as an auto loan.
