| the borrower.
Common uses of home equity loans are alternatives to traditional financing, paying for continued education, debt consolidation, home repairs and improvement, and vacation planning.
Equity lines of credit
The other common use of equity is as collateral that secures a line of credit. Much like a home equity loan, these credit lines can be offered by a number of banks and other lenders to individuals of a variety of credit ratings. Home equity lines of credit may even be issued with lower interest rates than some equity loans, since the amount borrowed is spread out over time instead of being in a lump sum.
Equity lines of credit are often used in home improvement projects to pay for materials and labor, as well as a variety of other personal and business ventures in lieu of a standard credit card or other credit line. The amount of credit available on the credit line depends on many of the same factors that |
