One of the most popular and advantageous forms of debt consolidation is a secured loan called the home equity loan (also called closed-end loan, term loan, or a second mortgage instalment). If you own a house, you can get a second mortgage in which the lender uses your home equity in the real estate property as security. Because the loan is guaranteed by your home the lender incurs less risk and can therefore offer low monthly payments at a low interest rate.
Most banks and mortgage companies offer the following two types of home equity loans: