A Home Equity Loan is a type of revolving line of credit or loan based on the equity in the mortgager's property. The property is the collateral for the loan, and it can be usable for any purpose, although most of the time it is used to consolidate credit card debt in order to obtain debt relief. This is made by allowing the mortgager to borrow against the equity of the property, up to 100 percent.

There are two different types of home equity loans commonly used for debt consolidation: the standard home equity loan, and the equity line of credit. A Standard home equity loan is usually referred to as a second mortgage installment loan, a term loan, or a closed-end loan. As occurs with credit card debt, borrower and lender arrange a payment agreement.

Standard home equity loans grant an amount of money loaned in a lump sum for a particular time, and guaranteed by your home. Debt relief is achieved by lowering the interest rate after consolidating your credit card debt, considering the fact that the home equity line of credit taken to replace funds up to a maximum amount, may go as high as 125 percent of the appraised value of your property.

Understanding your credit card debt allows you to pay into your properly built-up equity. Such equity is the value resulting from the difference between the amount your property could be sold for, and the amount that you still owe to the lender. Additionally, when your debt runs up without knowing exactly how, a home equity loan is also handy for debt relief.

In fact, many people discover that their credit card debt is out of control when they get their monthly bank statement. Common purchases, payment of services and occasionally getaways or dining out can bring your balance over-the-limit fees. However, debt consolidation may save the situation by rolling that debt into a home equity loan.

Consolidation is easier when you are planning to refinance your first mortgage, and the prime rate is below the average rate charged on the typical 30-year fixed mortgages. Debt relief by tapping your home equity is usually cheaper than get a home equity line of credit, and cost thousands of dollars less in closing costs.

Furthermore, debt consolidation with a home equity loan has the additional benefit of the rates and alleviating your credit card debt. Because interest and fees on these loans are generally lower than any first mortgage, and a Home Equity loan is the right solution for you when you are not able to find debt relief affording a 5-year or 10-year repayment loan schedule.

Natalie Aranda writes on loand, credit relied and personal finance. A Home Equity Loan is a type of revolving line of credit or loan based on the equity in the mortgager's property. The property is the collateral for the loan, and it can be usable for any purpose, although most of the time it is used to consolidate credit card debt in order to obtain debt relief. Understanding your credit card debt allows you to pay into your properly built-up equity.