Home Equity Loans vs. HELOCs
Usually, home equity loans are fixed rated while only some of HELOCs (Home Equity Lines of Credit). The basic difference between these two are tabulated below:
Basis |
Home Equity Loans |
HELOCs |
---|---|---|
Interest Rates |
Usually home equity loans are fixed rated |
HELOCs offers variable rate of interest. |
Credit |
A lump sum amount is provided during the initial period of loan. |
A line of credit is offered to the customers or borrowers. |
Mode of Repayment |
Repaid through fixed monthly installments |
The repayment amount changes over time. |
Term of Repayment |
The repayment term begins immediately after the disbursement of the lump sum amount. |
The repayment is limited to the interest during the term of the loan. The principal repayment starts at the time of repayment phase. |
Who can avail |
Suppose, during the start of a business, a lump sum amount is required, then this fixed rate home equity loan can be availed. |
If phase wise cash is required during emergency situation (suppose), then HELOC may be availed. |
Time Period |
Generally 5 to 15 years |
Drawing period (5 – 10 years) and repayment period (10 – 20 years) |
Available in India |
Highly available in India |
Not available in India |