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HELOC vs. Home Equity Loan

HELOCorHELDid you know you can use the equity in your home for home renovations, debt consolidation or to cover the costs of major purchases?

At South State, we offer both Home Equity Lines of Credit (HELOC) and Home Equity Loans that help you put the equity you’ve built in your home to good use. We’ve outlined the key benefits of each to help you determine which is best for you.

Home Equity Line of Credit

A Home Equity Line of Credit (HELOC) allows you to borrow against your home’s equity with a revolving line of credit1.  Your line of credit is a fixed amount for a set period of time with a variable interest rate that may be tax deductible2. With a HELOC, you can continuously use your revolving line of credit as needed.

A HELOC can be beneficial when you are unsure of exact costs when you are working on a major renovation project. It can also be used to help cover unexpected costs such as a broken water heater or medical expenses. You can use as much or as little as you need whenever you need it.

Summary:

  • Revolving line of credit
  • Borrow against the equity in your home
  • Variable interest rate and interest paid maybe tax deductible2
  • No annual fee

Home Equity Loan

A Home Equity Loan allows you to use equity in your home as collateral for a loan1.  With a Home Equity Loan, you can obtain a fixed-rate loan for a pre-determined amount that is secured against the value of your home.  Your fixed rate can be locked in for a set period of time and the interest paid on your loan may be tax deductible2.

A Home Equity Loan can be used to help you finance major expenses such as a new bathroom, remodeling your kitchen, building a deck or repairing floors.

Summary:

  • Set loan amount determined by you and your banker
  • Use equity in your home as collateral for a loan
  • Fixed interest rate and interest paid may be tax deductible2
  • No annual fee

Can’t decide which one is right for you?  We can help with what you need to make the decision right for you and your family. To get started, try calculating how much you can borrow from your HELOC with our calculator.

If you are interested in learning more click here to have one of our bankers contact you or call 1-800-277-2175.