Whether you need a lump sum of cash to pay college tuition, make home improvements, or pay off debts, a home equity loan can help.

Every year thousands of homeowners choose to apply for a home equity loan. The money can be used for a variety of purposes. In many instances, borrowers use the money to improve their overall credit.

The average household has more than $8,000 of credit card debt. Unless you enjoy a lot of disposable cash, it can take many years to reduce this balance. With a home equity loan, you’ll receive instant cash to pay off debts. And since home equity loans have low interest rates and fixed terms, you can be completely debt-free within a few years.

While home equity loans are beneficial, they’re certain risks to consider. Your home serves as collateral or security for the loan. Hence, people with good and bad credit can easily qualify. On the flip side, if you default on the loan, the lender can foreclosure on your primary residence.

Before applying for a home equity loan, consider whether you’re able to repay the money.