If you’re trying to figure out how to fund your home improvement project, you may have heard about a home equity line of credit, or HELOC. If you have, you’re probably aware that it’s a cross between a credit card and a home equity loan, where you have a set amount of money available for you to borrow as you need it. What might not be so clear, though, is how HELOC payments work, especially if you’ve never used a line of credit before.
Fortunately, HELOC payments aren’t that complicated. All you have to do is remember three points.
You Don’t Have to Pay During the Draw Period (but you Probably Should)
As previously mentioned, when you get approved for a HELOC, you have a set amount of money you can borrow, also known as your credit limit. You can now borrow up to your credit limit for a certain amount of time, which is called the draw period. The draw period usually lasts for a few years, so you don’t have to feel rushed.
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