HELOC is what kind of credit?

HELOC is what kind of credit?

• A. Open-ended
• B. Closed-end
• C. Installment
• D. Secured

Answer: (A)

A HELOC is best described as open-ended credit. It provides a revolving line of credit you can draw on, repay, and draw on again up to the set limit, typically during a draw period. You’re not given a single lump sum to repay in fixed installments; instead, you borrow what you need, pay interest on the outstanding balance, and can borrow again as long as you stay within the limit. While a HELOC is secured by your home, that collateral aspect is separate from the credit type classification. The other options describe different loan structures: closed-end loans provide a fixed amount upfront with a set repayment schedule, and installment loans are repaid over time with fixed payments.

A HELOC is best described as open-ended credit. It provides a revolving line of credit you can draw on, repay, and draw on again up to the set limit, typically during a draw period. You’re not given a single lump sum to repay in fixed installments; instead, you borrow what you need, pay interest on the outstanding balance, and can borrow again as long as you stay within the limit. While a HELOC is secured by your home, that collateral aspect is separate from the credit type classification. The other options describe different loan structures: closed-end loans provide a fixed amount upfront with a set repayment schedule, and installment loans are repaid over time with fixed payments.