What's the difference between a HELOC and a home equity loan?

Both let you borrow against your home equity, but they're structured differently. A home equity loan is a lump sum at a fixed rate with fixed monthly payments — predictable, good when you know exactly how much you need, like a single renovation. A HELOC (home equity line of credit) works like a credit card secured by your house: you draw what you need during a draw period, usually at a variable rate, and pay interest only on what you use, which suits ongoing or uncertain costs. The trade-off is that a HELOC's payment can rise as rates move, and after the draw period ends, your payment jumps when principal repayment kicks in. Both put your home on the line, so missing payments risks foreclosure — borrow conservatively. Compare rates, fees, and the draw-period terms before choosing, and avoid using either for routine spending.