 TITLE: What Is a Draw Period on a HELOC? CONTENT: Consider Additional Repayment Options\n-------------------------------------\nPaying off the HELOC in full before the draw period ends is the best option, leaving you with zero balance at the end of the loan. Review your budget looking for places you can cut costs and save money to put toward the HELOC balance.\nIf that's not possible, you have several options for refinancing or closing your HELOC before the draw period ends.\n*   **Refinance to another HELOC.** If you have good to excellent credit, you can apply for a new HELOC and use it to pay off the outstanding loan. During the draw period for the new HELOC, you can pay only the interest. However, unless you want to keep kicking the loan-repayment can down the road (and paying a lot more interest in the process), create a plan to chip away at the principal too.\n*   **Refinance to a home equity loan.** Similar to a HELOC, a home equity loan is secured using your home as collateral, and the amount you can borrow depends on your home equity. Unlike a HELOC, a home equity loan is an installment loan repaid in fixed payments over time; you can use it to pay off the HELOC and then pay off the home equity loan.\n*   **Do a cash-out mortgage refinance.** A cash-out refinance replaces your existing mortgage with a new mortgage for more than your previous balance. You'll receive the difference in cash, which you can use for any purpose—in this case, to pay off your HELOC. Mortgages typically have lower interest rates than HELOCs and home equity loans, and if mortgage interest rates have dipped since you originally got your mortgage, this option might save you even more money. But getting a new mortgage eats into your home equity. It can also be expensive, with fees and closing costs that may wipe out any savings.\nWhichever refinancing option you're considering, carefully weigh the costs against the potential savings to see if it makes sense for you.\nWhat if your financial situation has changed for the worse since you got the HELOC, and you're having trouble making payments? If you begin missing payments, your credit score may suffer, making it difficult to qualify for loan refinancing. If you find yourself in this predicament, see if your lender is open to some type of loan modification. END