A home equity loan enables homeowners to borrow funds by leveraging the equity in their property as security. Equity represents the discrepancy between the home's present market value and any outstanding mortgage or lien balances. Typically, these loans feature fixed interest rates and consistent monthly payments across a set timeframe, ensuring predictability and simplifying budgeting. They are commonly utilized for significant expenditures like home renovations, consolidating debts, covering medical expenses, or financing education.