What type of loan would be best to look for in the US, if I have an already paid off house as collateral for a $25,000 loan for 1 year?

  • 3
    OP, is it that you want to repay not a cent during the year, and then repay it all at once at the end? Is that correct? – Fattie Dec 1 '18 at 5:10
  • "Best" in what way? – Lawrence Dec 1 '18 at 16:45
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    It might be a good idea to mention how you know you'll be able to pay the money back after 1 year. You may get some additional good advice as a result. – TTT Dec 3 '18 at 19:11

An advantage of some home equity products is that you have the ability to have 5, 10 or even a 15 year payback period. This means that your required monthly payments are low, but you can also pay it back quicker.

If you have a home equity line of credit you can spend up to the limit, then pay it back, and have access to that amount of money again as long as the line of credit is still in the active period. The types of products give you a period of years where you have the ability to spend up to the limit, then the rest of the years are used to payback the loan.

Before 2018 an answer would discuss the rules for deducting interest payments on a home equity loan or line of credit, but in 2018 the new tax law changed those rules significantly. How you spend the money is the most important factor. In the new tax law the money has to be spent on fixing or improving the house in order to be tax deductible. Check the requirements before factoring taxes into the decision.


You can take the cash as a lump-sum payment and repay the loan over time at a fixed interest rate.

You can do a home equity line of credit (HELOC) and borrow what you need, as you need it, up to the credit limit. A HELOC offers flexibility to borrow money as you need it but tend to come with variable interest rates

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