What Is A Home Equity Line Of Credit Loan. A home equity line of credit also known as a heloc is a line of credit secured by your home that gives you a revolving credit line to use for large expenses or to consolidate higher interest rate debt on other loans footnote 1 such as credit cards. Heloc funds can be used to remodel your home pay for college or even take vacations.
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Heloc funds can be used to remodel your home pay for college or even take vacations. But it comes with costs. Instead of taking out a lump sum borrowers are given access to a credit line similar to how a credit card works and only charged interest on the amount they use.
But it comes with costs.
A heloc often has a lower interest rate than some other common types of loans and the interest may be tax deductible. It s a line of credit that allows you to borrow against. A home equity line of credit is a revolving source of funds much like a credit card that you can access as you choose. There are advantages and disadvantages with each of these forms of credit.
