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Credit cards are a popular way to have steady access to a line of credit you can borrow from and pay back over time. Though, they aren't the only way to finance an expense — especially if you're going to end up spending tens, or even hundreds, of thousands of dollars on a home remodel, paying off debt or even buying a second house. But if you own a house that you've been making mortgage payments toward, you just might be sitting on funding for that renovation or second property, and it's called a home equity line of credit.
A home equity line of credit (or HELOC for short) is a form of credit that you can use for large expenses—like a home renovation. The credit is secured by your home, which means if you fail to make payments toward the credit balance, the lender can use your home as collateral. While putting your home on the line can be a daunting decision, this form of credit comes with some benefits that other types of credit don't.
Below, Select explains how a home equity line of credit works, how to qualify for one and how it can actually be an advantageous way to fund large expenses.