With a Home Equity Line of Credit or Fixed-Rate Loan, getting the things you want can be easier than you think. Rather than taking advances on your high-interest credit cards, you can borrow against the equity you've built in your home. And, the interest you pay may be tax deductible.

There are many advantages to using your home's equity to pay for purchases rather than borrowing money the conventional way. Below are the answers that will help you decide if an equity loan is the loan for you :

Pros of taking out home equity debt

• In most cases, borrowers can deduct the interest on loans up to $100,000 on their taxes.
  
  
• The loans carry lower interest rates than credit cards and unsecured personal loans
  
  
• They can be used for lots of things: debt consolidation, home improvements, tuition, medical costs, emergencies and big-ticket items.

Cons of taking out home equity debt

• If you default, you could lose your home, your biggest asset.
  
  
• Such loans can be a risky spending tool for younger homeowners who are not established in their careers and have less experience owning a home and managing money.
  
  
• The loans can be risky for older homeowners who would be tapping their nest egg close to retirement.
  
  
• Credit lines have variable interest rates, so monthly payments can rise, even if your income doesn't.
  
  
• If your home's value drops, you can end up owing more than the house is worth -- a bad situation if you need to sell the house.
  
  
• Using an equity loan to pay off debt may make monthly payments cheaper but could cost you more in the long haul, because you're taking much more time to pay off the debt.
  
  
• You may not be able to lease your home during the term of your loan.