 TITLE: Do I Need Good Credit for a Home Equity Loan? CONTENT: Is a Home Equity Loan Right for You?\n------------------------------------\nHome equity loans can be a good borrowing option in the right circumstance, but there are some things to consider. Here's a quick summary of the pros and cons.\n### Pros of a Home Equity Loan\n**Low interest rates**: While a lower credit score could give you a higher interest rate, you'll likely still get a lower rate than you would with a personal loan. That's because the collateral—your home's equity—lowers the risk to the lender.\n**Interest may be tax-deductible**: If you use your loan to buy, build or substantially improve the home you use to secure the loan, you may be able to deduct the interest you pay. The deduction is available for qualified mortgage loans up to $750,000.\n**No restrictions for how you use the money**: Home equity loans function similarly to personal loans in that they don't require that you use the loan for a specific purpose. This means you can use a home equity loan to consolidate other debt, pay for home improvements or cover the cost of tuition for one of your children.\n> Find the best personal loans in Experian CreditMatch™.\n### Cons of a Home Equity Loan\n**You could lose your house**: Because your loan is secured by your home's equity, the lender has a right to that equity if you default on the loan. To get its collateral, the bank could foreclose on you and take the house to satisfy the debt.\n**High costs**: Just like your mortgage loan, home equity loans typically come with closing costs and fees. Depending on the lender, these costs could neutralize the savings you'd get with a lower interest rate.\n**You could end up underwater**: If you tap a large portion of your home's equity, it could leave you owing more than the house is worth if property values drop in your area. END