*Loan,banking and credit>>>credit line

What's the difference between a home equity loan and a home equity line of credit?

Are both legal in Texas?

A home equity loan is where you borrow a certain amount of money one time. For example, $20,000, the lender then amortizes that over a period of years with equal monthly payments as these are typically fixed rate loans. You pay the loan down but may not borrow it back. The equity line of credit is an actual line of credit meaning you may get a $20,000 line however, you can pay it back and borrow back up to the $20,000 at anytime. Typically these are interest only payments for the first 10 years and then amortized over 15 years after that. The interest rate on these is typically Prime (currently 8.25%) + a certain percentage over that. This rate is adjustable a fluctuates with Prime. Yes both are legal.

With a loan you are given the entire amount of money borrowed and you then start paying it back.

With a line of credit you are given a limit and you borrow up to that amount as needed. A little like a revolving credit card that is guaranteed by your home. They may actually give you a credit card or a checkbook to use.
a loan is where the bank gives you a one-time lump sum.

a line of credit is an open account that you can spend from at your discretion. Often times you have a check book and you can just write a check to anyone and the money goes against that open debt account.