Home Equity Loans vs. Lines of Credit

Not sure if you need a home equity loan or line? Compare the benefits! Both types offer:

• Low interest rates - Home equities offer some of the lowest rates available because they are backed by the equity in your home.
• Low closing costs - Paying $0 or as little as $399.00 to close the loan.
• Short processing time - Obtain funds quickly (usually just two weeks after approval).
• Life & disability insurance available - Protect your financial situation in case of a sickness or injury. Protect your family in case of death. The home equity will be paid off and will not tap into the your main life insurance policy.
• Possible tax advantages - Home equity loans and lines may have tax advantages. We always advise that you consult a professional tax advisor or accountant. If applicable, these tax savings will save you money compared to other types of loans.

But, there are some important differences:

Home Equity Installment Loan (fixed rate)

• Low, FIXED interest rate for life of loan - Your payment will always stay the same for the life of the loan - no surprises!
• Terms up to 15 years to repay - A longer amortization (payback) period makes payments very economical.
• All your money up front - You will get the full loan amount in one lump some after closing.
• Life & Disability insurance available - Protect your financial situation in case of a sickness or injury. Protect your family in case of death. Loan will be paid off and will not tap into the your main life insurance policy.
• Possible tax advantages - Home equity loans may have tax advantages. We always advise members to consult a tax advisor or accountant to be certain of tax advantages. This may save money compared to other financing options.

Home Equity Line of Credit (variable rate)

• Variable rate (capped at 15% APR) - You get the convenience of a revolving line of credit that you can use whenever you need it. The interest rate can fluctuate but is guaranteed to never go higher than 15% (many credit card rates can as high as 30% APR).
• Interest-only payments for the first five years - Lowers the monthly payment to make for easier financing. You will only pay interest on the funds (line) you've used.
• Access period of 10 years, 15 years to repay, with no need to re-apply - You can draw on the credit line for up to 10 years, then have an additional 15 years to repay.
• Money any time you need it - Access your funds (line of credit) by writing a check, using online transfers, or calling Telelink to make transfers to your checking account.