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Home Equity Loan vs. Home Equity Line of Credit (HELOC), What’s the Difference?

A home equity loan and a home equity line of credit (HELOC) are different ways that homeowners can leverage the equity they have established in their homes.

A Home Equity Loan provides a lump sum of cash, based on the amount of equity available in the home. These loans are ideal for those who need a specific amount for a one-time project or purchase and are typically paid back with fixed monthly payments over a set term.

On the other hand, a HELOC functions more like a credit card, offering a line of credit that can be utilized as needed. HELOCs can be repaid and then borrowed against again. HELOC interest rates are typically variable, making this a flexible option for ongoing expenses or projects where the total cost isn’t known upfront.

Choosing between a Home Equity Loan and a HELOC depends on the homeowner’s financial situation, the use of funds, and their repayment preferences. NIHFCU’s home loan specialists are here to help you understand the nuances of each option, and ensure you make the best decision for your needs.

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Rates, fees and terms as of July 14, 2024 and subject to change without notice

Financial wellness begins and ends with the facts. Here’s what you need to know!
All disclosed rates and terms are subject to change without notice.