Business and Personal Finance Dictionary

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• HOME EQUITY LOAN
  
  A loan in real estate property that is used to secure or guarantee the amount borrowed. Sometimes referred to as a second mortgage or borrowing against your home. The loan allows you to tap into your home's built-up equity, which is the difference between the amount your home could be sold for, and any claims held against it. People often use a home equity loan for home improvements or to pay for a new car. A home equity loan is a good way to borrow money for two main reasons. First, the interest rate is usually one of the lowest loan rates a borrower can get. Also, the interest you pay on the loan is usually tax-deductible. But taking out a home equity loan also means the lender can take possession of the home if the loan isn't repaid. This is why some people decide to not borrow against their home, and may decide to take out a personal loan. But for many borrowers, a home equity loan can be the best loan option. Your best loan option is the loan that best meets your needs.
  
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