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Repayment period

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Question: 
Does a HELOC have to have a repayment period?
Answer: 

Section 1026.40(d)(5) requires the disclosure of the draw period and any repayment period. During the draw period the consumer can obtain draws on the account and make at least the required minimum payment for each billing cycle. During the repayment period no further draws are allowed and the remaining balance must be paid according to the terms of the account agreement. Some plans require payment of the full amount of the balance outstanding at the end of the draw period. Other plans allow the balance due at the end of the draw period to be paid over an extended term.

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First published on 09/05/2021

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