Home Equity Loan

A home equity loan (HELOAN) is a loan that is taken out by a borrower that uses the equity someone has in their house as collateral. When a borrower takes out a HELOAN, they get a loan for a specified amount and take it out immediately. They can then use that money for whatever they want, and, since the loan is secured against the equity they have in their house, they will pay it back at a fixed interest rate. That interest rate is often lower than would be offered on a personal loan, because the loan is backed up by the equity in the house. Plus, a Home Equity Loan has a fixed repayment schedule, so it’s easy to budget and make plans for.

A HELOC is generally more flexible than a Home Equity Loan, because, with a HELOC, the borrower can choose when and how much money they take out against the line of credit. A HELOAN is a specific amount of money, paid back in a specific time period with a fixed interest rate, so it’s easier for borrowers to plan around.

A Home Equity Loan works similarly to other types of personal loans. With a Home Equity Loan, a borrower uses the equity they’ve built up in their house as collateral for a loan. Once the loan is approved, the borrower receives it in a lump sum and then has a fixed amount of time to pay it back, with a fixed monthly payment and interest rate.

Borrowers must come into a branch to apply for a Home Equity Loan. The process for a Home Equity Loan is similar to other personal loans, but includes a portion that verifies the value and equity in your house.