Home Equity Loans vs. Home Equity Line of Credit

What's the difference between an HE loan and a HELOC?

Both options allow you to borrow against the appraised value of your home, providing you with cash when you need it. Generally speaking, you can borrow up to 85% of your home's value with an HE loan; think of it as a second mortgage. HELOCs start with a borrowing period for when you can access the money, followed by a repayment period, when borrowing must stop and payments are required.


  • Has a credit limit and a specified borrowing period, usually 10 years.
  • Only pay interest on the money you use.
  • Most charge variable interest rates.
  • During the borrowing period, you will need to at least make payments on the amount you owe.
  • Once the borrowing period ends, you'll repay the remaining amount with interest, just like a loan.
  • Gives you the flexibility of a financial backstop that's there when you need it.


  • You apply for only the amount you need.
  • Most charge a fixed interest rate that doesn't change.
  • Each monthly payment includes the interest charges and a portion of the loan principal.
  • Can give you a lump sum of cash at loan closing.

To apply for an HE loan, please visit https://www.decu.com/borrow/re...



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