What is a home equity loan?
Home equity loan: A home equity loan lets you borrow a lump sum against the equity in your home, the difference between its value and what you owe. Your home secures the loan.
Home equity loans usually have a fixed rate and fixed monthly payments over a set term. Lenders typically limit how much you can borrow based on your home's value and your existing mortgage balance.
Because your home is the collateral, falling behind on payments could put your home at risk.
When you compare offers
Compare a home equity loan with a HELOC and with unsecured options, weighing closing costs and the risk to your home as well as the APR.
Related guides
- Home Equity Loan vs. HELOC: What to Compare
How a home equity loan differs from a HELOC, what it means that your home secures the debt, and the details worth comparing before you borrow against your equity.
- How Much Can You Borrow Against Your Home?
How lenders estimate your usable home equity, what combined loan-to-value means, and what else shapes how much you may be able to borrow with a home equity loan or HELOC.
This glossary is for general educational purposes and isn't financial, legal or insurance advice. Lendara is not a lender and does not make credit decisions. Lendara is a free online marketplace that connects you with participating lenders and providers, who set their own eligibility rules, rates, fees and terms. Lendara may receive compensation from partners, which may affect which offers appear and their order.