Most of the people in UK fulfill their financial needs by taking loans. There is a significant increase in the number of people availing loans for different financial purposes. And this has given rise to a large number of lenders offering various kinds of loans in the financial market. Some of the most common loans being secured loans, unsecured loans, personal loans, business loans, homeowner loans, holiday loans, home equity loans etc. But, here we will specifically focus on home equity loans.

Home equity loans are those secured loans that are taken against the equity tied up with your house. It means that if you have already taken a loan against your home you can use a part of its equity to avail another loan. Suppose you had taken a loan of say, 65% of the equity of your house then you can use the rest 35% of the equity and take a home equity loan against it.

Take another example. The value of your house was £ 50,000 ten years ago and you had taken a homeowner loan against it. Now, the value has increased and has become £ 80,000. So, you can easily avail a home equity loan against the equity in your house that is £ 30,000.

Being secured loans by nature, home equity loans are cheap loans. The interest rates charged on such loan is low. The Annual Per cent Rates are also low. The monthly installments are small and the repayment duration is longer. This enables you to pay less than you would pay for an unsecured loan.

Home equity loans can be utilised for a number of purposes. You can use the money raised by the loan to renovate your house, to buy a new car, to fund your education, to finance your marriage, to buy your dream holiday package etc.

The best part of availing a home equity loan is that you utilise the intrinsic value of your house. And, since the interest rates are low you don’t end up paying a large some of money to your lender. So, if you feel that the equity in your house is underutilised, go get a home equity loan.