Home Equity Line of Credit
A home equity line of credit (HELOC) is a type of loan that allows you to borrow against the equity you have in your property, like a home equity loan. However, a HELOC works more like a credit card, in that you can access funds as needed, up to a pre-approved credit limit.
There are several benefits to taking out a HELOC. First, you only pay interest on the amount you borrow, rather than the full credit limit, which can make it a more cost-effective option for those who only need to borrow a smaller amount of money. Second, a HELOC provides you with flexibility and convenience, as you can draw on the line of credit as needed, rather than taking out a lump sum of cash upfront. This can be particularly beneficial for homeowners who are making ongoing home renovations or who have unpredictable expenses. A HELOC often has lower interest rates than other types of loans, such as credit cards or personal loans, making it a more affordable option for borrowing money.