A home equity loan is a loan that allows home owners to borrow against the equity in their home.

A home equity loan uses the equity built up in your home, (the value of your home minus what you owe) as a security that you'll repay the loan. Depending on the lender you can usually borrow between 80%-100% of your home's equity, and sometimes more. Homeowners usually apply for home equity loans to pay college tuition, to make major renovations on a home or to pay off credit card debt. Home equity loans have a fixed interest rate and payment for usually 10-15 years.