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HELOCs and home equity loans should be carefully compared to determine which is safer for your unique financial situation. Getty Images/iStockphoto
Both home equity loans and home equity lines of credit (HELOCs) are effective tools for homeowners looking to borrow a large sum of money. In today’s unique economic climate, they’re also one of the less expensive alternatives, with interest rates on both substantially lower than what’s currently available with credit cards and personal loans. Plus, with the average homeowner in possession of around $320,000 worth of equity, there’s plenty of potential funding to utilize for a wide range of needs.
That all noted, HELOCs and home equity loans work in different ways and borrowers should understand the nuances of both before acting. If they’re unable to repay all of the money withdrawn, they could potentially see their home foreclosed on by the lender. To avoid this situation, then, homeowners should take some preemptive steps. And that means understanding when each product could be the safer option this year. Below, we’ll detail what prospective borrowers should consider now.
See how much equity you’d be eligible to borrow here.
HELOCs vs. home equity loans: Which is safer for 2025?
The interpretation of which home equity borrowing product is
HELOCs vs. home equity loans: Which is safer for 2025?
