Keep in mind that there is a distinction between a Line of Credit, which is gained through the equity in your home, and an Equity Loan. Understanding that, let's explore the difference.

They are identical in what type of loan they are, but the way they are used is much different. The Equity Loan is more like a one-time request to either purchase something, such as a new roof, or to consolidate higher interest loans, such as credit cards and/or car loans. Another name for it is a second mortgage.

A Line of Credit, on the other hand, is somewhat like a credit card account. It is money borrowed that sits in an account where it can be deposited to and withdrawn from, at will, without any services fees.

Unlike a credit card, however, the interest on an Equity Line of Credit is much lower. And similar to your credit card, there is no interest accrued when the money is not used, or if it is paid back before the end of the month when the interest applies. And this feature provides an amazing opportunity.

There is a warning, however. And the warning is this: If someone decides to use an Equity Loan, rather than a Line of Credit to only get relief from the high interest bearing loans, such as a credit card, it could be more like a trap than a benefit.

In other words, if you were not able to keep from getting that far into debt before the Equity Loan, now that there is more of your cash flow available from the lowered interest charges, what will keep you from getting into the former position again—but this time without the equity available as an escape? That is where the following comes into play.

A change of thinking is needed. The plan of attack should be to use an Equity Loan to free up some of your cash flow, but only for the purpose of using it to pay down principle on your remaining loans, including your mortgage, and head down the road of financial freedom, instead.

It is an obtainable goal—and a much quicker one than most people think.

Do you want to learn the best way to escape paying interest? You can get my free ebook, How to Significantly Lower the Interest on All Your Loans, Including Your Mortgage, and That Without Refinancing.

To get the free ebook, click here: Lower Interest On All Loans.

Alfred Spengly currently works with a company that has been registered with the better business bureau since 2006 with zero complaints. It is a company that strives for its customer's satisfaction, helping individuals and families manage their own money by providing the tools they need to establish their own financial security.

Personally, Alfred has worked in the financial field for almost 15 years.