Equity is the difference between your home’s market value and the amount of money you owe on it. Getting a home equity loan allows you to borrow against the amount of equity in your home. Because it is a secured loan, it usually has a much lower interest rate than the other loan options that are available. There are three great reasons to get a home equity loan.

Use the money to pay off high interest debts.

The interest on a home equity loan will be much smaller than the interest on credit cards. Taking out a home equity loan to pay off high interest debts makes a lot of sense because it will save you lots of money over the long run. Because the interest is less, you will find that your monthly payment is much less than you were paying when you had checks going out to several companies. Take that extra money and use it to pay off the debt quickly or use the extra money to live on, so you aren’t tempted to charge up your credit cards again.

Use the money to pay for a college education.

With the price of tuition today, it is hard to figure out how to pay for your children’s college education. Home equity loans offer you a much lower interest solution than taking out an unsecured loan or borrowing against your retirement.

Use the money to remodel your house.

Take the equity in your home and make it work for you. By borrowing against the equity in your home and then reinvesting that money back into your home you will increase the value of your house, essentially adding equity to your home. Improvements such as bathroom remodels, kitchen remodels, or even room additions increase what your home is worth and are a great reason to take out a home equity loan.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

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