Quick Definition

A home equity loan is a type of secured loan where borrowers use the equity of their home as collateral to receive a lump sum of money.

Examples

• 1A homeowner takes out a home equity loan to fund a major kitchen renovation.
• 2A couple borrows against the equity of their home to consolidate high-interest credit card debt.
• 3A family uses a home equity loan to finance their child's college education.
• 4An individual secures a home equity loan to invest in a small business venture.

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