An equity line of credit is a line of credit that is secured by the equity in your home. In most cases an equity line of credit has an adjustable rate that is tied to the prime rate. Equity lines of credit are often referred to as HELOCS in the mortgage and banking industries.

An Equity Line of Credit is often used to borrow cash against a home. Whether it's to consolidate debt or receive cash for home improvements, a Home Equity Line of Credit (HELOC) is secured against your home.

Generally, the interest you pay on an equity line of credit is tax deductible. This can help around tax time when you are itemizing your deductions to get more money back. Therefore, an equity line of credit may be well worth obtaining to consolidate debt and turn the interest you are paying into a tax deduction.

 

 ++