Pros and cons of equity debt

In most cases, borrowers can deduct the interest on loans up to $100,000 on their taxes.

The loans carry lower interest rates than credit cards and unsecured personal loans.

They can be used for lots of things: debt consolidation, home improvements, tuition, medical costs, emergencies and big-ticket items.

If you default, you could lose your home, your biggest asset.

Such loans can be a risky spending tool for younger homeowners who are not established in their careers and have less experience owning a home and managing money.

The loans can be risky for older homeowners who would be tapping their nest egg close to retirement.