The advantage of a HELOC is that you don’t begin making payments until after you begin borrowing against your line of credit. A HELOC usually has a fixed “draw period,” such as 10 years, during which you can borrow money and are only required to make minimum payments on the interest you owe. You can apply for a HELOC but never choose to use it unless necessary. In contrast, a home equity loan provides funds in full immediately upon closing, but you must start repaying the loan every month. A home equity loan typically charges a fixed interest rate, while a HELOC’s interest rate can vary. Both types of financing require using your home as collateral.