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A HELOC, or Home Equity Line of Credit, is a type of loan that allows you to borrow money using the equity in your home as collateral. It is similar to a credit card in that you are given a revolving line of credit that you can use as needed.  You only pay interest on the money you borrow and the revolving line remains open for the first 10 years. After the interest-only (draw period) 10 years, the balance will be amortized for a monthly payment to pay off the loan in full over the next 20 years. HELOCs have a variable interest rate, typically based on Prime Rate plus a certain margin. HELOCs are a good option for homeowners who need to borrow a large amount of money for home improvements, debt consolidate, buying a large asset like a car or investment property, stock investments, cover large expenses, or even just have available for a rainy day or emergency. The flexibility to only pay interest on the money actually used can be very appealing.