what's the difference between a debt consolidation and home equity loan..also what differences in rates/terms

Answer 1

Debt consolidation, consolidates any debts you have, like 3 different credit cards and you end up paying one price for all three. Usually you save some money with a debt consolidation loan. A home equity loan is is a loan based on the equity of your home, if you bought your home for 150K and now it appraises for 225k, this equity built up goes toward the collateral of a loan. They do usually require excellent credit to get though.
-Now about rates, there is an ARM mortgage which is an adjustable rate mortgage, meaning for the first 5 or so years of a loan you pay a low fixed interest rate, then after that term ends the rate goes up a considerable amount. A fixed rate mortgage is 30 year fixed interest rate. If you have crappy credit you are usually offered an ARM loan, and in my opnion I would not take it unless you know in 5 years you could afford what the monthly payment would be.
-There are many different terms to loans, usually you have to pay 10% down so you will not have to pay Mortgage Insurance, if it is not met you will have to pay even more for added PMI insurance included in your monthly payment.

Answer 2

A debt consolidation loan can be any loan taken out to aggregate a number of other loans or debts into a single loan. It describes what you're doing with the loan proceeds, not how the loan is funded or secured.

A home equity loan is simply a loan secured by your home, other than a mortgage loan used to purchase the home. The funds could be used for repairs or improvements to the home or for pretty much any other purpose, including debt consolidation.

Rates and terms for any type of loan are all over the chart and will depend upon your creditworthiness more than anything else.

Answer 3

basically, a home equity loan uses the equity in your home as collateral, kind of like a mortgage, whereas debt consolidation loans are generally just personal loans, no collateral. rates vary.