Home Equity Loan vs. Line of Credit

Having trouble deciding between a home equity loan or line of credit? Consider the following criteria to determine which is right for you.

	Home Equity Credit Line	Home Equity Loan

What You Get	Revolving credit of up to 100% of the value of your home minus any outstanding debts against it. Some lenders will provide a home equity credit line of up to 125% of the value of your home.	Fixed amount of money, up to 100% of the appraised value of your home minus any debts against it.
Qualifying	You will need proof of income, home ownership, your mortgage, and how much equity you have in your home. Appraisal is usually required for a home equity credit line.	Same requirements as a home equity credit line, in addition to proof that you own at least 20% equity in your home. Appraisal required.
Repayment	Minimum payments, as little as interest only, per month. Eventually must be repaid in full.	Fixed payments of interest and principal over a finite period of time.
Loan Term	Home equity credit line usually has a 10- to 20-year draw period where you can access the credit line, followed by a fixed period where you have to pay off the balance plus interest.	Term can range from one year to 30 years.
How You Receive the Money	Draw funds as needed, usually by writing special checks.	Receive one lump-sum payment up front.