A regular home equity loan is useful if you need a lump sum of cash for a particular purpose, such as paying off other, high-interest debts or a one-shot home improvement such as replacing your roof. They're usually set up as fixed-rate home equity loans, so your monthly payments never change and you begin repaying it almost immediately. Loan terms usually run from 5-15 years.
A HELOC is good for an ongoing project where you'll have irregular expenses over time, such starting a business or a home improvement project where you'll be paying for supplies and the work in stages.
HELOCs are divided into a draw period, typically 5-10 years, when you can borrow against your line of credit, and a repayment period when you pay back whatever you've borrowed. They're usually set up as an adjustable-rate, interest-only loan during the draw period, then convert to a fixed-rate home equity loan when the repayment period begins.
HELOCs generally offer the best home equity loan rates, at least initially, because adjustable rates run lower than fixed ones do. However, that can change over time if market rates increase and your HELOC rate rises with them.
With many HELOCs, you can repay loan principle without penalty during the draw period, then borrow again as needed, so it can serve as a reserve pool of funds to use and repay as the situation warrants.
HELOCs tend to have lower up-front fees than standard home equity loans, and may charge no origination fee at all. However, you may have to pay an annual fee for each year the line of credit stays open, regardless of whether you have an outstanding balance or not.
More information: Home Equity Loan vs. HELOC: Know the Differences