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Home Equity Loans
10 popular uses for a home equity loan/HELOC
Updated Jul 03, 2026
Reviewed by
Key takeaways:
You could use a home equity loan or HELOC for almost any purpose, from home improvements to debt consolidation.
A home equity loan gives you a one-time loan amount, while a HELOC gives you a credit line you can borrow against, repay, and borrow again up to your credit limit.
Common uses include home improvements, repairs, and medical bills.
If you own a home, you have funding options for your next big goal. The equity you've built up over time (the difference between what your home is worth and what you still owe on your mortgage) may already be the resource you've been looking for.
A home equity loan is a way for you to borrow a lump sum against the equity in your home. It typically carries a fixed interest rate and predictable monthly payments over a set term.
A home equity line of credit (HELOC) is a way for you to borrow, repay, and borrow again up to your credit limit. Because your home serves as collateral with either option, you might access lower rates than unsecured borrowing options such as credit cards or personal loans. With either of these options, you could lose your home if you don’t repay the loan.
What can you use a home equity loan or HELOC for?
Home equity financing is flexible. A car loan, for example, is only for a car. With a home equity loan or HELOC, you decide how to use the funds based on your financial priorities. Here are 10 common uses.
1. Consolidate debt
A home equity loan could help you consolidate high-interest debt and reduce what you pay in interest over time.
Imagine you have $20,000 in high-interest credit card debt. If you can borrow against your home at a lower interest rate than your credit card carries, you might pay off that balance faster and pay less in interest over the life of the loan.
2. Home improvements and repairs
Renovation projects make your home feel more like your own. The right upgrades could also increase your home's value. A home equity loan for a remodel might help you get there without depleting your savings.
You'll also occasionally need to make repairs to keep things running, whether it's your water heater, HVAC system, or roof. These are all significant expenses that could strain any budget and often arrive without much warning.
3. Major purchases
You have a home, and you may need things to go in it, like:
New appliances
New furniture
Smart home upgrades
A home security system
Electronics
These are all expenses you might fund with the equity in your home.
4. Medical expenses
Health care costs can be significant, even with insurance. A single medical event might leave you with substantial bills. A home equity loan or HELOC could help you pay off your medical expenses and also cover some bills in case you need to take unpaid time off of work to recover from an injury or illness.
5. Financial emergencies
Life comes with unexpected expenses, large and small. A job change you didn't plan for. A car repair that can't wait. The equity in your home could help cover a major repair or unexpected expense so you might get back on your feet sooner.
6. Plan a wedding
Although weddings can run the gamut from blown-out affairs to small gatherings, even a modest wedding involves some big costs. A home equity loan or HELOC could be a practical source of funding for your big day when the numbers add up.
7. Education expenses or student loans
Tuition, fees, and other education costs can add up quickly. Your equity in your home could help you cover college expenses or refinance existing student loans.
8. Pay for a vehicle
A HELOC or home equity loan could help you buy a car, truck, or other vehicle. If traditional auto loans don’t meet your needs, it could be a relief to know other options are available.
9. Take a vacation
Funds from the equity in your home could help you pay for a major trip. You wouldn’t need to miss out on making those family memories.
10. Start a business
A home equity loan or HELOC could give you the startup capital to launch or grow a small business. If your lender permits business use, you could use the money for licenses, supplies, and other costs.
When a home equity loan may not be the right fit
A home equity loan or HELOC works best in specific situations. It might not make sense if:
You want to consolidate debt but you don't qualify for a rate that's lower than what you currently pay
Closing costs would offset the financial benefit
Your income is unstable, or long-term repayment feels uncertain
You want to cover lifestyle expenses that you could fund another way.
A Mortgage Advisor could help you find out whether the numbers work for your situation.
Home equity loan vs. HELOC
If you're weighing your home equity options, it helps to understand how a home equity loan compares to a HELOC. The two are often confused, but they are not the same.
Feature | Home equity loan | HELOC |
Structure | One-time loan | Credit line |
Rate | Usually fixed | Variable or fixed |
Best for | One-time expense | Ongoing or flexible borrowing |
A home equity loan tends to work well when you know exactly how much you need and want a predictable payment. A home equity line of credit might be a stronger fit if your expenses are spread over time or you want flexibility in how much you draw. Most lenders offer variable-rate HELOCs. Achieve offers a fixed-rate HELOC, which means your rate stays consistent over the life of the line.
Author Information
Written by
Rebecca is a senior contributing writer and debt expert. She's a Certified Educator in Personal Finance and a banking expert for Forbes Advisor. In addition to writing for online publications, Rebecca owns a personal finance website dedicated to teaching women how to take control of their money.
Reviewed by
Kimberly is Achieve’s senior editor. She is a financial counselor accredited by the Association for Financial Counseling & Planning Education®, and a mortgage expert for The Motley Fool. She owns and manages a 350-writer content agency.
Frequently asked questions
A home equity loan can be used for almost any purpose, because lenders place few restrictions on how you spend the funds. Common uses include consolidating high-interest debt, paying for home improvements, covering medical bills, and funding major purchases, such as buying a second property.
You may be able to use a home equity loan to address high-interest debt, if you apply for and receive a lower rate and the new loan helps simplify your finances. This is a common strategy for consolidating unsecured debt into secured debt tied to your home.
A home equity loan is a mortgage. Equity—the difference between your home's current value and what you still owe—serves as the basis for the loan. You pledge your home as collateral, which is why rates may be lower than unsecured borrowing options like personal loans. You repay the loan with interest according to a schedule set by your lender.
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