A home equity loan is a loan that the borrower gets that is based on the equity in their home, which is the market value of the home minus anything that is owed on the home. For those that have just purchased a home, the equity is not there yet since the first years of mortgage payments are basically paid towards the interest. However, over years the equity increases in your home.
There are many reasons why people use home equity loans. These loans help many people to achieve a certain home improvement that they were wanting to make, paying off any debts that they may have, taking a vacation or any other goal or financial emergency that may arise. However, the main reason that people choose a home equity loan over another type of loan or credit is that the home equity loans have attractive low interest rates and in most cases are tax deductible. All in all, home equity loans are attractive ways to get the money that you may need.