Home Equity Loan is a method of borrowing money in which the borrower uses the equity of his or her home as collateral.

The loan amount is determined by the value of the property, and the value of the property is determined by an appraiser from the lending institution.

Home equity loans are often used to finance major expenses such as a college education.

The difference between a home equity loan and personal loan is collateral.  A personal loan is unsecured debt, meaning it is not backed up by collateral. By contrast, a home equity loan is secured debt.  You borrow against the value of your home.  This means your home acts as collateral.

The advantage with a Home Equity Loan is that the interest rate is substantially lower than a non-collateral loan.