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Home Equity Loans

Borrow Smart: Home Equity Loans and HELOCs for Every Need

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Two Ways to Turn Your Home Equity into Opportunity

Unlock the full potential of your home’s value with a loan backed by your home’s equity. Whether you’re planning a major renovation, consolidating debt, or covering unexpected expenses, Home Equity Lines of Credit (HELOC) and Fixed Term Home Equity Loans provide flexible and affordable options to help you achieve your financial goals. At People Driven Credit Union, we offer both loan types to fit your unique needs, giving you the power to borrow with confidence, enjoy competitive rates, and take control of your financial future. Discover which home equity solution is right for you and start making your home work for you today!

Membership and eligibility requirements apply, with approval subject to application, credit, and property considerations.

PDCU Home Equity Loan Options:

HELOC vs. Fixed Term: Which is Right for You?

When it comes to tapping into your home’s equity, two popular options are a Home Equity Line of Credit (HELOC) and a Fixed Term Home Equity Loan. While both allow you to borrow against the value of your home, they are designed for different financial needs. Understanding how each works and their key differences can help you decide which loan option best fits your situation.

Fixed Term Home Equity Loan

A Fixed Term Home Equity Loan, also known as a 2nd mortgage, provides you with a lump sum of money upfront, which you repay over a set period of time with fixed monthly payments. This type of loan offers stability and predictability, as both your interest rate and payment schedule remain the same throughout the life of the loan.

Key Features of a Fixed Term Home Equity Loan:

  • Fixed Interest Rate: Your interest rate is locked in, meaning your monthly payments will stay the same.
  • Lump Sum Payout: You receive the entire loan amount upfront, making it ideal for one-time expenses like a major home improvement project, debt consolidation, or a large purchase.
  • Predictable Repayment: Because your payments are fixed, it’s easier to budget and plan for repayment over the long term.

A Fixed Term Home Equity Loan might be the better option if you prefer a structured repayment plan and need a specific amount of money for a particular purpose.

Learn more about a Fixed Term Home Equity Loan at People Driven Credit Union.

Home Equity Line of Credit

A HELOC is a revolving line of credit, similar to a credit card, that allows you to borrow against the equity in your home. With a HELOC, you’re given a credit limit and can borrow as much or as little as you need over time, typically during a draw period (often 5-10 years). During the draw period, you only pay interest on the amount you’ve borrowed, and after the draw period, you enter the repayment phase, where you pay back both principal and interest.

Key Features of a HELOC:

  • Flexible Borrowing: Borrow only what you need when you need it.
  • Variable Interest Rate: HELOCs typically have a variable interest rate, meaning your payments can fluctuate over time.
  • Interest-Only Payments: During the draw period, you make interest-only payments, keeping your monthly expenses lower at first.

A HELOC is ideal for ongoing or unpredictable expenses, like home renovations or medical bills, where you want flexibility in how and when you access funds.

Learn more about a Home Equity Line of Credit (HELOC) at People Driven Credit Union.

What’s the Difference?

  • Borrowing Structure: A HELOC offers flexibility with a revolving credit line, while a Fixed Term Loan provides a lump sum upfront.
  • Interest Rates: HELOCs typically have variable rates, meaning your payments can fluctuate, while Fixed Term Loans come with a fixed rate, giving you predictable payments.
  • Repayment: HELOCs often allow interest-only payments during the draw period, followed by principal and interest payments later. Fixed Term Loans require both principal and interest payments from the start, providing a clear repayment plan.

Which Loan Option is Right for You?

Choosing between a HELOC and a Fixed Term Home Equity Loan depends on your financial needs and preferences.

Consider a HELOC if you:

    • Need ongoing access to funds for multiple projects or expenses.
    • Prefer the flexibility to borrow as needed over time.
    • Are comfortable with variable interest rates and the potential for payment fluctuations.

A Fixed Term Home Equity Loan might be a better fit if you:

    • Have a specific, one-time expense that requires a lump sum.
    • Prefer the stability of fixed monthly payments and a predictable repayment schedule.
    • Want to lock in a low interest rate to avoid future rate hikes.

Ultimately, the right loan depends on your unique situation, budget, and goals. If you’re still unsure, we’re here to help!

Explore more about HELOCs or the benefits of a Fixed Term Home Equity Loan. Let People Driven Credit Union guide you in finding the best option to make the most of your home’s equity.

Speak with an Expert

Not sure whether a Home Equity Line of Credit (HELOC) or a Fixed Term Home Equity Loan is the right fit for you? Our expert People Driven Credit Union customer service representatives are ready to assist! Whether you need guidance on your borrowing options or help deciding which loan best meets your needs, we’re here to provide personalized advice.

Contact us today at 248-263-4100, and let our team help you unlock the full potential of your home’s equity.