If you need $20,000 in financing right now, you may be thinking about one of the traditional ways of borrowing with a credit card or personal loan. But in the interest rate environment of July 2025, the costs associated with both are high, with interest rates on personal loans around 12% now and those on credit cards just under a recent record high of 23%.

If you're a homeowner, however, even one with just a few years of mortgage payments completed, you may be able to access this much money with ease, tied to an interest rate many points lower than these two popular options. Two of the more popular ways are home equity loans and home equity lines of credit (HELOCs). These products allow you to borrow from your accumulated equity and they come with favorable tax advantages if used for select purposes. 

But they don't operate identically and they don't come with identical interest rates, either. So, if you need $20,000 worth of equity now, it helps to know which will come with the cheaper repayments if applied for this July, specifically. Below, we'll do the math.

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$20,000 HELOC vs. $20,000 home equity loan: Which is cheaper this July?

The average HELOC interest rate is 8.27% right now, while the median home equity loan rate is 8.28%, according to . While that makes a HELOC marginally cheaper now, it may not be the case for very long, as HELOC rates are variable and liable to change monthly for borrowers based on market conditions. Home equity loan rates, on the other hand, are fixed and will remain constant until refinanced by the homeowner. 

Here is what each will cost now, assuming the HELOC rate remains the same over the common 10- and 15-year repayment periods:

• 10-year $20,000 HELOC at 8.27%: $245.52 per month
• 15-year $20,000 HELOC at 8.27%: $194.26 per month

• 10-year $20,000 home equity loan at 8.28%: $245.62 per month
• 15-year $20,000 home equity loan at 8.28%: $194.38 per month

So, right now, payments on either product are essentially the same. Being cognizant of the inevitability of HELOC rate changes, however, prospective HELOC borrowers should calculate their future repayments against rates both higher and lower than today's average. 

For example, if the average HELOC rate ticked up 25 basis points to 8.52%, the above payment would tick up $3.15 to $248.19 monthly for 10 years and $2.92 ($197.18 monthly) for 15 years. And if it dropped by 25 basis points to 8.02%, it would fall by $2.65 to $242.87 monthly for 10 years or by $2.90 to $191.36 each month for 15 years. 

But the key here is to calculate variability. With the home in question functioning as collateral, it's critical that repayments can be made with ease, and, if in doubt, consider locking the home equity loan rate now, even if it's marginally higher.

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The bottom line

The payments homeowners will be expected to make when borrowing $20,000 with a home equity loan or HELOC are essentially the same this July, but that doesn't mean they will be in August, and they're almost assuredly likely to be different in the months and years to come. Take the time, then, to calculate costs here with precision and don't forget to account for any fees or closing costs, which could vary based on the lender.