A home equity loan or line of credit allows you to borrow money, using your home's equity as collateral.

Let’s review some concepts:
Collateral is that you pledge as a guarantee that you will repay a debt. If you don't repay the debt, the lender takes your collateral and sells it to get its money back. With a home equity loan or line of credit, you pledge your home as collateral. You can lose the home and be forced to move out if you don't repay the debt.

Equity is the difference between how much the home is worth and how much you owe on the mortgage.

A home equity loan is a second mortgage that lets you turn equity into cash, allowing you to spend it on home improvements, debt consolidation, college education or other expenses.