A home equity line of credit (HELOC) is a type of loan that allows homeowners to borrow money against the equity in their home. Equity is the difference between the home's current market value and the outstanding mortgage balance. A HELOC provides a revolving credit line, meaning borrowers can withdraw funds as needed, up to a predetermined limit, and only pay interest on the amount used. Typically, HELOCs have a draw period, often lasting 5 to 10 years, during which borrowers can access funds. After this period, they enter the repayment phase, where they must pay back the principal and interest. This flexibility makes HELOCs a popular choice for financing home improvements, education, or other expenses.