A home equity line of credit allows the homeowner to borrow and use their home as collateral. A home equity line of credit is often used for large expenses, like a child’s college education or unexpected, expensive bills.

Upon receiving the home equity line, you’ll be approved for a certain limit. This is the maximum amount that may be borrowed at any given time for the duration of the plan. The lender may set the limit as a percentage, based on the value of the home and the amount owed.

Once the line of credit is approved, you’ll be able to borrow, usually through checks. Sometimes, a borrower may be given credit cards to use the borrowed money, but there may be spending minimums for these credit cards.