In real estate finance, an Equity Loan is a loan that is secured by the borrower’s equity in a property. The amount that can be borrowed is based on the difference between the property’s current market value and the outstanding balances of any existing loans secured by the property.
Equity loans are commonly used to access cash for purposes such as home improvements, debt consolidation, or other major expenses. Because the property serves as collateral, interest rates are often lower than those of unsecured loans, but failure to repay the loan can put the property at risk of foreclosure.
