A home equity loan (term loan) is one large sum that is paid off over a period of time.  Rates and payments remain constant (fixed rate), and once the loan is closed you can no longer borrow from that loan.  A home equity loan typically has a lower rate than a HELOC and is used for debt consolidation and other single-purpose purchases.  125% home equity loans allow you to take out a loan for a value greater than that of your home.