Which type of credit product has a line of credit that can be drawn as needed and repaid over time?

• A. Fixed-rate mortgage.
• B. Installment loan.
• C. HELOC.
• D. Personal loan.

Answer: (C)

A line of credit that can be drawn as needed and repaid over time is a revolving loan secured by home equity. A HELOC lets you borrow up to a set limit, take funds whenever you need them during the draw period, and repay what you’ve drawn (often with interest-only payments initially). As you repay, you free up borrowing capacity to take more funds later. After the draw period ends, you enter a repayment phase where you repay the outstanding balance over time, with no new withdrawals allowed. This flexible, reuse-friendly structure is what distinguishes it from other products.

Fixed-rate and installment loans provide a lump sum up front with regular, fixed payments until payoff, and personal loans work similarly—there’s no revolving line to borrow against again after you repay.