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Both products let you borrow against your equity, but they suit very different situations.
| Home equity loan | HELOC | |
|---|---|---|
| How you get the money | One lump sum up front | A revolving line you draw as needed |
| Interest rate | Usually fixed | Usually variable |
| Payments | Fixed from day one | Interest-only during draw, then P+I |
| Best for | A known, one-time cost | Ongoing or uncertain costs |
When each wins
Choose the lump-sum loan when you know the amount and want a predictable payment — a $40,000 remodel or a debt payoff at a fixed rate. Choose the HELOC when the cost is unknown or spread out and you want to pay interest only on what you draw. Estimate either with the HELOC payment calculator or home equity loan calculator.