<topic sku="core" tNum="288325" author="sallyh" xmlns="x-schema:hhTopicSchema.xml"><index><title>Learn about home equity line-of-credit accounts</title><category>accounts</category><klink type="cncpt">Tell me about home equity line-of-credit accounts</klink></index>
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<p>Home equity lines of credit are similar to home loans. Both use your home as collateral, both are generally tax deductible, and both can offer fixed or variable interest rates that are generally lower than credit card debt. However, with a home loan you borrow one lump sum and pay interest on that total. With a line of credit, you borrow only the amount of money you need when you need it, up to a certain credit limit set by your lender. You pay interest only on the money you actually use.</p>
<p>Most planners encourage having a home equity credit line as a safety net for emergency situations. It's best to set one up before you need it so you're prepared for the unexpected.</p>
