A major kitchen renovation is one of the highest-value home improvements you can undertake. To finance such a large project, homeowners often turn to their most significant asset: their home equity. Both a Home Equity Loan (HELoan) and a Home Equity Line of Credit (HELOC) allow you to borrow against your home’s value, but they function very differently, and the choice depends entirely on your project’s timeline and your risk tolerance.

Both options use your home as collateral (secured loans), meaning the interest rates are generally lower than unsecured loans (like credit cards), but failure to repay can lead to foreclosure.

Home Equity Loan (The Fixed Option)

A Home Equity Loan is an installment loan. You receive a single, fixed lump sum of cash upfront, and you begin repaying the principal and interest immediately with fixed monthly payments.