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Before choosing one from the two possible variants, you should understand the difference. When you decide to get a home equity loan, you take cash out of the equity of your home. You get a lump-sum amount of money at once. But when you get a home equity line of credit, you have a possibility to get the amount you need when you require it. You don’t have to take out all the money at once.

The main advantage of HELOC is that you will not pay interests on the total amount. Instead, you have a source of cash and have to pay only when you get money. As soon as you return the money, you can borrow it again. So, you get something like a credit card but with a better interest rate.

However, if you need a lot of means at the moment, you should use a home equity loan. Just determine what you need money for and get as much as you need.

Our useful tips for getting a second mortgage may be of great help to you for making the right decision.