What Is a Home Equity Loan?

A home equity loan allows you to borrow against the equity — the difference between your home’s value and your remaining mortgage balance. It’s typically issued as a lump sum with a fixed interest rate and repayment term.

In my experience, home equity loans can be a smart way to finance renovations, debt consolidation, or large expenses, provided they’re used wisely. Because your home serves as collateral, it’s essential to borrow conservatively and maintain consistent payments to protect your investment.