HELOC loan interest paid is typically (depending on specific circumstances) deductible under federal and many state income tax laws. This effectively reduces the cost of borrowing funds. HELOCs offer flexibility not found in most other loans, both in terms of borrowing and repaying on a schedule determined by the borrower. The underlying collateral of a home equity line of credit (HELOC) is the home and failure to repay the loan or meet loan requirements may result in foreclosure.
