A Home Equity Loan provides the opportunity to borrow against the equity in your home. The advantage of a home equity loan is that by using your home as collateral, you often are able to borrow money at a lower interest rate, saving you money.
A home equity line of credit, or HELOC, works more like a credit card in that it makes a certain amount of credit available to you as you need it, for a limited term. This allows you to borrow as much or as little as you need, within your credit limit. A HELOC also has an adjustable rate that changes with the market, which means that your payments will fluctuate with changes in interest rates and will vary as your balance changes.
Home Equity Loans and Lines of Credit are very often used to finance home remodeling and repairs, but they are not limited to property improvements.
A HELOC makes sense if you need to borrow smaller amounts over a longer period of time, whereas a home equity loan is better if you need a large amount of money all at once.