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r e d f c u.o r g
YOU ASK – WE ANSWER!
Do not email any account or personal identification information.
To address other financial questions, call Redstone at 256-722-3796
or email aspire@redfcu.org.
Need a "get out of debt" plan or just need
someone to review your credit report
with you? Redstone
,
s accredited financial
counselors can help..
HELOC vs. Home Equity Loan
Is a Home Equity Line of Credit (HELOC) and Home Equity Loan the
same product?
No, a HELOC and Home Equity Loan are similar but different products.
Here's what you need to know:
• Both are options for homeowners looking to take advantage of their
home's equity. Unlike home equity loans, with which you borrow a lump
sum, HELOCs allow you to borrow in smaller amounts so that you're only
borrowing what you need when you need it. Borrowing only what you need
can keep your monthly payments lower and help you avoid unnecessary debt.
• A good candidate for a HELOC is a homeowner with considerable equity.
You also need good credit to qualify, as well as an ability to repay – as with
any loan.
What are the disadvantages of a HELOC?
• One disadvantage of a HELOC involves the borrowers themselves. Lack of
discipline can get borrowers into trouble. Because a HELOC allows you to
make interest-only payments during the draw period, it is easy to use cash
impulsively without considering the potential financial ramifications.
• It's also important to remember that a HELOC uses your house as collateral,
and if you don't repay, you can lose your home.
Redstone offers both HELOCs and Home Equity Loans. Contact us at redfcu.org for
more information based on your specific situation.
