A home equity line of credit (HELOC) is a type of loan that allows homeowners to borrow against the equity in their homes. Equity is the difference between the home's current market value and the outstanding mortgage balance. HELOCs provide a revolving line of credit, 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, the loan enters a repayment phase, where the borrower must pay back the principal and interest.