As home values are continuously rising and mortgage balance is shrinking, many homeowners are relying on the most powerful option i.e., home equity. The idea of using home equity to pay off credit cards, personal loans, or other high-interest debt will be an exciting and tempting way. Many homeowners are thinking of using home equity to pay high credit card interest rates (like 20% or more) with a much lower interest rate from a home equity loan or line of credit (HELOC)? This option looks like a smart move in some situations, but there are some major risks which we can’t ignore. This article explains the pros, cons, and key considerations before you make this crucial financial decision. What is Home Equity? Home equity is defined as the difference between your home’s market value and the amount you still owe on your mortgage. For example, if your home worth is ₹1 crore and your outstanding mortgage is ₹50 lakhs, your equity will be ₹50 lakhs. You can access this equity through the following ways: Home Equity Loan: A lump sum loan amount repaid with fixed monthly installments. Home Equity Line of Credit (HELOC): A revolving line of credit you can draw from as needed.