Which Is Right for You?
For a full plain-English decision guide, see the plain-English guide. For five worked examples with real numbers, see real examples.
HEL
Debt consolidation ($30k credit card debt)
Fixed amount, fixed rate, locks in the saving.
HEL
Kitchen renovation ($40k fixed bid)
You know the exact amount and need it on day one.
HELOC
Emergency fund backup
No cost until you draw. Sits at $0 until you need it.
HELOC
College tuition (4 years)
Draw each semester. Pay interest only on what you use.
HEL
New roof ($15k)
Fixed one-time cost. No need for revolving credit.
HELOC
Uncertain medical expenses
Draw what you need, when you need it.
Both put your home at risk. A home equity loan and a HELOC both use your home as collateral. If you cannot make payments, the lender can foreclose. Never borrow against your home for discretionary spending.