Home Equity Line vs. Home Improvement Loan: Which One Fits Your Plans?

Reading time: 2 minutes

What You’ll Learn

The difference between a Home Equity Line of Credit (HELOC) and a Home Improvement Loan
When a flexible borrowing option or fixed payments might work best for your needs
How each option can help fund home renovations, tuition, weddings, or major life expenses
Tips to choose the right loan for your budget and repayment timeline

Need a kitchen upgrade?
Paying for a wedding?
Helping with tuition?
Finally tackling that home project you’ve been putting off?

If you’re figuring out how to pay for it, you’ve probably come across two general options: a Home Equity Line of Credit and a Home Improvement Loan. Understanding these borrowing options is easier than you think.

Home Equity Line of Credit (with Lock Option)

Best for: Bigger expenses or when you want flexibility.

A home equity line lets you borrow against the equity — the portion of your home’s value you fully own — you’ve built up in your home. Instead of receiving all the money at once, you can draw from it as needed.

Common uses:

Home renovations
Tuition expenses
Weddings
Consolidating higher-rate debt
Other major life events

How it works:

Borrow against your home’s equity
Home appraisal is typically required
Access funds when you need them
Pay only on what you use
Variable interest rate (may change with the Prime Rate)
Monthly payments can fluctuate
With St. Mary’s Bank you can lock portions into fixed-rate segments

Think of it like: Flexible access to funds, there when you need it.

TIP! Use Free Digital Tools

How big of a home equity line of credit can you receive?

Home Equity Calculator

Home Improvement Loan

Best for: A specific home project with a clear budget.
This loan is designed strictly for home improvements and works more like a traditional personal loan.

How it works:

Receive the full loan amount upfront
No home appraisal required
Fixed interest rate
Fixed monthly payments
Set repayment schedule

Think of it like: Predictable payments you can plan around.

Which One Fits You?

Choose a Home Equity Line if:

You want flexibility
You may borrow in stages
You want a longer term to borrow and repay

Choose a Home Improvement Loan if:

You have a set budget
You prefer fixed payments
You want a clear payoff timeline

Big plans or small upgrades — it helps to understand your options before you borrow.

Have Questions?

Great! Our member support team is here to help. Connect with us:

At a branch location
Chat online at stmarysbank.com
Call 888-786-2791

Federally Insured NCUA. Equal Housing Lender. NMLS ID# 690869