As mentioned above, a home equity loan is paid out in a lump sum and repaid in fixed monthly installments over a set term. On the other hand, a home equity line of credit (HELOC), works much like a credit card. You can use the credit line up to the established limit, but you pay only for what you use — plus interest. HELOCs have a set draw period, during which you can use the credit line. When the draw period ends, the HELOC goes into repayment and you can’t tap any more equity from the credit line.