A Home Equity Loan provides homeowners with an alternative to taking a loan. When you have a significant expense to incur and cannot avail a personal loan or any other loan to cover it, you can take a home equity loan. You can get a home equity loan even when you have an outstanding home loan against the property.

In simple words, a home equity loan is a loan you receive using your home's equity as collateral. It is also known as a second mortgage, equity loan, and home-equity instalment loan. You can get this loan against both residential and non-residential properties. The property must be entirely constructed and have a clear title to be eligible for this loan.
The lender will calculate the value of your property based on the current market value. The loan amount will be based on the property's market value after deducting any outstanding home loan balance and can go up to 60% of the net worth. The maximum loan tenure is 15 years. You also have the freedom to spend that loan amount for any purpose you want. There are two types of home equity loans:
Fixed-Rate Loans: As the name suggests, in fixed-rate loans, the entire amount is given in a single lump-sum payment. The interest rate is also fixed and does not fluctuate as per the changes in the market conditions. The borrower has to pay the loan amount in a predetermined period.
Home Equity Lines of Credit (HELOC): HELOC is similar to how a credit card works. In this, you can borrow some amount from the amount pre-approved by the lender. You can make withdrawals from the amount at any time you want through a chequebook or credit card, and interest is calculated only on the amount you have borrowed. However, like fixed-rate loans, HELOC also has a fixed tenure.