A home equity loan, sometimes called a term loan, allows you to borrow money against the value of your home, if your home is worth more than you owe on it.  It is a one-time lump sum of money that is paid off over a set amount of time, with a fixed interest rate, and the same payment each month. Once you get the money, you cannot borrow further from the loan.

Home equity loans are a great way to get some extra cash for home improvements, consolidating debt, and other unforeseen expenses. Since they are secured against your house, they are easier loans to obtain than other types, and they are often appealing to homeowners, especially those with less than perfect credit.

Some benefits of a home equity loan include:

• They generally have a lower interest rate than other types of loans
• They are easier to qualify for if you have bad credit
• Interest costs may be tax deductible
• Borrowers can qualify for large loans