Whats the difference between a loan and line of credit?
A home equity loan is a specific amount of money borrowed against your home’s equity. The loan is paid off at a fixed interest rate for a specific period of time. A home equity line of credit, also known as a HELOC, is a bit different. The line of credit gives you access to a certain amount of money over a period of time to use as needed. The interest rate on a line of credit is variable, unlike the locked-in rate on a home equity loan. How can I use the loan? The money could technically be used for anything, but it is generally considered wise to use your home equity to improve your financial situation or invest in the future. When you’re applying for the loan, the bank will ask how the money will be used. The most common use of the loan or line of credit is for major home improvements that will bring even more value to the property. Other common uses include consolidating credit card debt or paying for college tuition. This can save thousands of dollars of interest from high-rate cre
