On the other hand there is home equity line of credit that is more like a credit card. It facilitates the borrower to borrow in installments. Here the borrower is issued a cheque book or a credit card by the bank which he can use against his home's equity to make the purchases. He can borrow only a certain amount of loan money which he needs instead of borrowing and keeping to himself the total lump sum amount. The interest rate in this type of loan starts building only when the person actually makes a purchase. A line of credit home equity loan has flexible interest rate that varies throughout the loan term and therefore, monthly payments also fluctuate depending on the varying home loan rates.
Home equity loans are a potentially money-saving option for homeowners who want to consolidate debt. They are easily available to any person depending on his credibility and are also very beneficial in terms of the tax rebate that they offer to the borrower.
There are possible tax deductions on home equity loans where as other personal and consumer loans typically have no tax deductions and higher interest rates. It makes them one amongst the cheapest in the loan market.
Even the bad credit borrowers are provided these loans as they are considered risk free from the lender's point of view. Bad credit people just need to provide their annual income and employment documents to the lender in order to avail such a loan.
Home Equity loans are provided by almost all public, private banks and housing finance institutions. However the approval of such a loan will depend on the lender's policy and it is the lender who will decide how much he is ready to give you for a home equity loan. But it always better to compare on all the rates that are offered by various home equity loan providers.