Yesterday, we took a look at the home equity loan. Today we are going to have a look at the home equity line of credit.

In reality, a home equity line of credit is another type of home loan. However, instead of getting the value of your home in a lump sum payment, you instead get access to a credit line that works much like a credit card. You can use the home equity line of credit as needed, and as you pay down your "balance," you can take more out. However, unlike the interest on a credit card, the interest on a home equity line of credit can be tax deductible (check with the IRS to make sure yours qualifies).

Next week, we will look at the pros and cons of a home equity loan versus a home equity line of credit.

Tags: home equity, personal finance, home equity loan, finances,
home equity line of credit