2006-07-26 06:51:08 · 7 answers · asked by K D 1 in Business & Finance ➔ Personal Finance
A home equity loan would provide you a lump-sum of cash upon closing, which you could then use as your heart desires. You would make regular monthly payments, similar to the ones you would make on a mortgage.
A home equity credit line would establish an amount that you could draw upon, and draw down as you need it, similar to a credit card. Your payments would depend on how much of the credit line you had accessed
2006-07-26 06:56:15 · answer #1 · answered by TonySabs 3 · 1⤊ 0⤋
A home equity loan works just like a mortgage. It is a set amount and you pay it off over however-many years.
A home equity line of credit is more like a credit card, you borrow so much and as you pay it off and reduce the Principle (line) amount you can still borrow against that again.
So a loan you just pay off, but a line you can keep and borrow against again and again as time progresses.
2006-07-26 06:56:31 · answer #2 · answered by tressa1220 3 · 0⤊ 0⤋
a home equity loan is a lump sum amount you get from taking out a loan using your house as collateral.
a home equity line of credit is where you are allowed to spend up to a certain amount almost like a credit card and you are charged interest based on the balance of the amount you have spent.
2006-07-26 06:56:03 · answer #3 · answered by rweasel6 2 · 0⤊ 0⤋
The credit line is what you can borrow. The equity loan is what you actually take out, but it can't go above the credit line.
2006-07-26 06:56:10 · answer #4 · answered by Irish 7 · 0⤊ 0⤋
I believe a loan is one lump some that you get, upon approval.
There is a fixed (usually) interest rate and your payments are set to pay a certain amount to principal & some to interest, as in a regular loan.
A line of Credit is an amount you are allowed to access, and your payments revolve around how much of that money you withdraw fand use- changing interests rates as you take out.
Usually you 've got a limited number of withdrawals- like 3 or something and each time you widthdraw funds, your interest rate is determined relative to that days rates.
CAT
2006-07-26 07:03:29 · answer #5 · answered by in2it4life 1 · 0⤊ 0⤋
Loan: one time amount of money, repaid money stays in bank.
Line: Money paid back becomes equity and can be used for other purposes.
2006-07-26 06:56:33 · answer #6 · answered by Don't look too close! 4 · 0⤊ 0⤋
I found some good info here.
2006-07-26 08:04:47 · answer #7 · answered by Anonymous · 0⤊ 0⤋