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A Home Equity Line of Credit (HELOC) and a Home Equity Loan (HELoan) are two different products, despite their similar names. Before you commit to either one, Bellco Federal Credit Union can help you understand the differences between them to help you choose which one is the best path for you.

Bellco FCU is a member-owned, not-for-profit federal credit union that has been offering unique financial products and services to people and small businesses in Berks County since 1938.

Just like for-profit banks, we offer checking and savings accounts, personal loans, home loans, and credit cards, but with better rates and fewer fees. We provide a safe place to save and borrow along with exceptional customer service.

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About Home Equity Lines of Credit (HELOC)

Home Equity Line of Credit, or HELOC, can provide you with a loan for up to 85% of your home equity value. The HELOC works somewhat like a credit card, and is made available to you for a limited time period (typically 5 or 10 years).

Unlike a traditional Home Equity Loan (described below), the interest rate on the HELOC is adjustable (not fixed), which means it may change over the term of the loan.

During the draw period (typically 5 or 10 years), you can withdraw funds from the credit line up to your credit limit. Withdraw as much as you need, when you need it, and make a minimum payment on the amount withdrawn. As you pay off the principal, your credit revolves, and you can use it again and again for the duration of the draw period.

During the repayment period, you will be required to make monthly principal and interest payments until the entire loan has been repaid (typically up to 10 years).

About Home Equity Loans (HELoans)

The traditional Home Equity Loan, or HELoan, is a second mortgage that is secured by the equity in your home. It provides funds in a lump sum at a fixed rate for a fixed term (up to 15 years). It is similar to refinancing your mortgage, but without many of the closing costs.

Use the funds to replace the roof on your home, finance a home improvement project, assist with debt consolidation, pay off a major unexpected expense, and so on. The loan is repaid in budget-friendly fixed monthly payments, just like your original mortgage.

Join Bellco FCU Today

Membership in Bellco FCU is open to individuals who live, work, worship, or attend school in Berks County, PA. Simply open a Member Savings account with as little as $5, and set up your membership in a few simple steps.

Once you are a member, your immediate family members will also be eligible to join and take advantage of competitive rates for mortgages, personal loans, credit cards, and the many other services we offer.

If you’re not sure whether a HELOC or HELoan will best meet your needs, the trusted and experienced professionals at Bellco FCU are always available to answer your questions and help you choose the best solution.

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