Banks use the two names almost interchangeably in their ads, and the products behave nothing alike. A home equity loan is a second mortgage: a lump sum at a fixed rate, amortized over a set term, with a fixed monthly payment that includes principal and interest. You get all the money on day one and pay interest on all of it from day one. Pay extra and the balance drops, but you can't take it back out. Once it's paid, it's closed.
A HELOC is a line of credit. There's a limit, a balance that floats under it, a variable rate, and interest calculated on what you owe each day. Pay it down and the room comes back. Pull from it again next month without a new application. The payment during the draw period is usually interest only. What the lender looks at before approving one is in what lenders look at before they give you a line of credit.
Paycheck parking runs entirely on that second set of features. The paycheck goes in and the balance falls, so the daily interest falls with it. The bills go out over the month and the balance climbs back. The interest you pay is on the average of that curve, which sits well below the balance you started the month with. And when a chunk goes to the mortgage, the room to do it comes from the same account you've been sweeping. None of that works on a home equity loan. Deposit your paycheck into one and you've made a permanent prepayment. There's no pulling it back for the electric bill on the 20th.
The home equity loan has real uses, though. A one-time cost with a known payback, a rate you want locked, a payment you'd rather have forced than chosen. If you're not going to run the sweep, it's often the cheaper and calmer way to borrow against the house, and it doesn't come with the variable-rate exposure a line of credit does.
The tell is in the paperwork. If the document says "loan," the payment is fixed, and there's a maturity date with the balance at zero, it's a second mortgage with a friendlier name, and it won't park anything. If it says "line of credit," has a draw period, and a payment that changes with the balance, it's the tool. Some lenders offer a line of credit with a fixed-rate lock option inside it, which gives you both from one account.
When you apply, say the words "revolving line of credit" and ask for the draw period in years. If the answer is a number of months and a fixed payment, you've been handed the wrong product, and it's easier to fix at the application than after the money's disbursed.