There are definitely pitfalls, however. The interest rates that most credit-card companies charge range as high as 20% per year. In addition, a consumer is more likely to rack up debt using a credit card (as opposed to other loans) because they are widely accepted as currency and because it’s psychologically easier to hand someone a credit card than to fork over the same amount of cash. (To read more on this type of loan.

Home-Equity Loans
Homeowners may borrow against the equity they’ve built up in their house using a home-equity loan. In other words, the homeowner is taking a loan out against the value of his or her home. A good method of determining the amount of home equity available for a loan would be to take the difference between the home’s market value and the amount still owing on the mortgage.

The loan proceeds may be used for any number of reasons, but are typically used to build home additions, or for debt consolidation. The interest rates on home-equity loans are very reasonable as well. In addition, the terms of these loans typically range from 15 to 20 years, making them particularly attractive for those looking to borrow large amounts of money. But, perhaps the most attractive feature of the home-equity loan is that the interest is usually tax deductible.