Home Equity Line Of Credit (HELOC)

Home Equity Line Of Credit, or HELOC, is a line of credit designed specifically for homeowners.  With HELOC, the borrower’s home is used as a collateral to allow the homeowner to draw on the line of credit at his or her discretion (up to the maximum established amount). Interest is charged on a predetermined variable rate, which is usually based on prevailing prime rates.

Once there is a balance on the loan, the homeowner can repay any amount as long as minimum payment is made monthly. The term of a HELOC can last from less than five to more than 20 years, at the end of which all balances must be paid in full.