What’s the difference between a home equity loan and a line of credit?

What’s the difference between a home equity loan and a line of credit?

A home equity loan provides a lump sum with fixed payments, while a line of credit offers flexible borrowing up to a limit.

Which option is better for home renovations?

It depends on your needs. A home equity loan is great for large, one-time expenses, while a line of credit is better for ongoing projects.

Are there any risks involved with either option?

Yes, both options use your home as collateral. If you fail to repay, you risk foreclosure.

What are the interest rates like for each?

Interest rates can vary. Home equity loans usually have fixed rates, while lines of credit often have variable rates.

How do I apply for either of these?

You can apply through banks or credit unions. They will assess your credit score and home value.