More and more lenders are offering home equity lines of credit.A home equity line of credit is a form of revolving credit in which your home serves as collateral.Home Equity Line of Credit Calculator lets you view the payment and amortization schedule for this kind of loan

equity is the amount of ownership you have in your home. It is the difference between how much money the home is worth, and how much money you still owe the bank Home equity loan, then, is a loan that is backed by the equity in your home

If you have bad credit you may not be allowed to borrow the full amount of the equity in your home and you will most likely pay a higher interest rate than you would if you had good credit. You are more likely to be required to get an adjustable rate home equity lines of credit if you have bad credit.

- The interest you pay is tax-deductible in almost all cases (but check with a tax advisor to be sure).

- Because the loan is secured and the lender is taking essentially no risk, the interest rates are generally quite low

The tax deductibility of home equity loan interest makes the low interest rates even lower. For example, suppose you are in the 25% federal and 6% state marginal tax brackets, for a total of 31%. In this situation, the effective interest rate on a home equity loan is 31% less than the actual rate. For example, for a 5% home equity loan:

Effective rate