Racked up holiday bills? Consolidate your debt smartdecision-januaryslideswith a home equity loan!   There are typically two types of Home Equity Loans:   Closed-End Home Equity Loan(HEL) A home equity loan is, at heart, a second mortgage. You receive a lump sum at a fixed rate of interest that's locked in when you procure the loan. You're expected to pay it back in fixed monthly payments for a fixed amount of time -- typically 10 to 15 years.   Pros: · Your interest rate is fixed. · Because payments are due monthly, this can be a good option if you have a hard time exercising the discipline needed to pay off a loan a little at a time on your own. · The interest rate on a HEL, though higher than that on your primary mortgage, will still be lower than the rates available on credit cards. · If you're using your HEL to pay off credit cards, in addition to lower interest rates, you'll have the benefit of consolidating all your debts into one payment. · The interest on your home equity loan may be tax-deductible. Please consult your tax advisor for guidance.   Home Equity Line of Credit (HELOC) A home equity line of credit, by contrast, functions more like a credit card -- using your home as collateral.You ask for a line of credit, and the lender assigns a maximum amount you can borrow -- a credit limit. Lenders typically determine this amount by taking a percentage of your home's appraised value and subtracting the amount you still owe on the mortgage; then they factor in things such as your credit history, debt load, and income. The bank then gives you a debit card that you can use to withdraw funds. Unlike a HEL, the line of credit allows you to borrow what you need, when you need it, up to the full amount approved.   Pros: · You don't have to borrow in a lump sum; you can withdraw the funds when you need them. · HELOCs can be used as emergency funds in the event of a crisis, like losing your job, since you can access funds on an ongoing basis as needed. · The rates of interest, though variable, may still be lower than other forms of consumer credit, since they are secured with collateral -- your home. · The interest on your HELOC may be tax-deductible. Please consult your tax advisor for guidance.   clickheretsb