Skip to Content
Close Icon

Beachwood Office (888) 801-1666 Open Geo Locator

Your Preferred Branch

Beachwood Change Location

25201 Chagrin Boulevard
Suite 120
Beachwood, OH 44122

Phone: (216) 359-5580
Fax: (216) 359-5581

View Driving Directions

Change Preferred Branch

  • Ada Office
    118 South Main Street - Ada

  • Beachwood Office
    25201 Chagrin Boulevard, Suite 120 - Beachwood

  • Bellefontaine North Office
    1120 North Main Street - Bellefontaine

  • Bellefontaine South Office
    1454 South Main Street - Bellefontaine

  • Chardon Office
    348 Center Street P.O Box 1078 - Chardon

  • Cortland Office
    3450 Niles-Cortland Road - Cortland

  • Dublin Office
    6215 Perimeter Drive - Dublin

  • Garrettsville Office
    8058 State Street - Garrettsville

  • Kenton Office
    100 East Franklin Street - Kenton

  • Lake County Loan Production Office
    8373 Mentor Avenue - Mentor

  • Mantua Office
    10691 Main Street - Mantua

  • Marysville Office
    160 Coleman's Crossing Blvd. - Marysville

  • Middlefield - Main Branch Office
    15985 East High Street, P.O. Box 35 - Middlefield

  • Middlefield - West Branch Office
    15545 West High Street. P.O. Box 35 - Middlefield

  • Newbury Office
    11110 Kinsman Road, P.O. Box 208 - Newbury

  • Orwell Office
    30 South Maple Street, P.O. Box 66 - Orwell

  • Plain City Office
    490 South Jefferson Avenue - Plain City

  • Powell Office
    10628 Sawmill Parkway - Powell

  • Solon Office
    6134 Kruse Drive - Solon

  • Sunbury Office
    492 West Cherry Street - Sunbury

  • Twinsburg Office
    2351 Edison Boulevard, P.O. Box 560 - Twinsburg

  • Westerville Office
    17 North State Street - Westerville

  • Westerville Office
    33 S. Cleveland Avenue - Westerville

Contact Us
Online Banking Login

Blog

Home Blog Home Equity Loan vs. Home Equity Line of Credit

Home Equity Loan vs. Home Equity Line of Credit

Posted On: December 13, 2022 by The Middlefield Banking Company in: Home Mortgages Personal Loans

Home Equity Loan vs. Home Equity Line of Credit

A Home Equity Loan and Home Equity Line of Credit are both loans that use your home as collateral. Though they are very similar, they are different loans. Keep reading to learn what a Home Equity Loan and Home Equity Line of Credit are, their differences, and their benefits! 

What Are They and How Do they Differ? 

A Home Equity Loan or a Home Equity Line of Credit, commonly known as a HELOC, are both loans which use your home as collateral. Both are fantastic options for borrowing money if you’ve paid down a significant portion of your mortgage.  

Home Equity Line of Credit: A HELOC is a line of credit in which the lender will agree to lend a maximum amount within an agreed-upon period and variable interest rate. Essentially, a HELOC uses a percentage of your home’s equity to provide a revolving line of credit, much like a credit card. Your monthly payments with a home equity line of credit will change over time. With a HELOC, disbursement of funds is as needed.  

Home Equity Loan: A home equity loan is very similar; however, a home equity loan is a lump sum that is disbursed upfront and paid back in fixed installments. Your monthly payments will be the same each month.  

Pros and Cons 

Home Equity Line of Credit (HELOC)  

Pros:  

  • You only borrow as much money as you need 

  • Flexible repayment 

  • May come with little to no fees 

Cons: 

  • Variable interest rates (changes based on market fluctuation) 

  • Not a set repayment plan (can be a pro for some) 

  • Could lose your home if you default on the HELOC 

Home Equity Loan 

Pros:  

  • Fixed interest rate 

  • You borrow a lump sum to use for nearly anything 

  • Little to no fees 

  • Set repayment plan (could be a con for some) 

Cons: 

  • Best terms go to those with a good credit score 

  • If property values decline, you may owe more than your home is worth 

  • Could lose your home if you default on the loan 

As you can see, a home equity loan and home equity line of credit are fantastic options for homeowners. Now that you know the benefits and main differences, which is best for you? These loans are a great source of value to access cash for renovations, large purchases, home remodel projects, college tuition, a new vehicle, or nearly any other need. Visit our website to learn more or stop in to talk with a lender!

0 comments