A home equity loan, also known as a second mortgage, allows homeowners to borrow money from their homes' available equity.

Home equity loans are commonly used for debt consolidation, home improvements, educational expenses, unplanned emergencies, vehicle purchases, and other gifts and purchases.

The two most popular types of home equity loans are a home equity line of credit (HELOC) and a home equity fixed loan.

A HELOC offers you a revolving credit line with a variable rate, much like a credit card. You draw only what you need, when you need it. They normally have a lower monthly payment because your payments are interest-only.

With a home equity fixed loan you receive the entire loan amount at once. A home equity loan offers the stability of a fixed rate and fixed payments over the life of the loan.