Home Equity Line Of Credit (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.
