HELOC vs. Home Equity Loan: Line of Credit or Lump Sum?
West Capital Lending offers both HELOCs and home equity loans, and they solve the same problem in different ways. I'm Phil Hagey, a loan officer with West Capital Lending. I compare both across more than 160 lenders and show you an estimate for each so you can choose with clear information.
Side by side
| HELOC | Home equity loan | |
|---|---|---|
| Your first mortgage | Stays in place | Stays in place |
| How you receive funds | Draw as needed during a draw period | One lump sum at closing |
| Interest structure | Often variable, so costs can change | Usually fixed terms |
| Repayment | A draw period, then a repayment period. Required amounts can rise when repayment begins | Set repayment schedule from the start |
| Flexibility | Borrow, repay and draw again during the draw period | No additional draws after closing |
| Best suited to | Ongoing or uncertain costs | A known, one-time expense |
| Main trade-off | Flexibility, but less predictability | Predictability, but less flexibility |
Features vary by lender and program. Phil gives you an estimate for each option so you can compare actual costs.
A HELOC may fit you if…
- Your costs will come in stages or aren't fully known yet
- You want access to funds without using them all at once
- You're comfortable with costs that may change
- You may want to repay and draw again
A home equity loan may fit you if…
- You know exactly how much you need
- You prefer set terms and a predictable schedule
- You're paying for a one-time expense, like consolidating specific debts
- You don't want the temptation of an open line of credit
Not sure? That's normal. I'll compare both with you and tell you plainly if neither is a good fit for you.
Learn more
Frequently asked questions
What's the main difference between a HELOC and a home equity loan?
A HELOC is a line of credit you draw from as needed, while a home equity loan gives you one lump sum with set terms. Both keep your first mortgage in place. Phil Hagey can show you an estimate for each.
Which one is easier to budget for?
A home equity loan usually is, because its terms are set from the start. A HELOC's costs can change, and required amounts can rise when the repayment period begins. Phil Hagey walks you through both before you decide.
Can I get either one if I already have a HELOC?
In some cases, additional options may be possible, depending on your combined loan-to-value, credit, and the property. Availability varies. Phil Hagey can check whether any lender options fit your situation.
Does Phil Hagey offer both?
Yes. Through West Capital Lending, Phil Hagey compares HELOC and home equity loan programs across more than 160 lenders in the states where he's licensed.
Want to see both side by side? Call Phil at 949-864-1497 or request an estimate.
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HELOCs and home equity loans are secured by your home. Loans subject to credit approval and property eligibility.