An Equity Loan is also referred to as a Mortgage Loan. Typically, this loan is secured by real estate that is already owned by the borrower.
For example, if you brought a home for a sum of money, and do not have a mortgage on it, they may take a loan on their house, in exchange for a mortgage title.
Typically, an equity loan is taken when you are in dire need of money. Things might not be looking up for you at the moment, and you may have had to face back to back financial emergencies, which may be forcing you to take an equity loan.
An equity loan is more beneficial than a standard loan, as it is more suited to fill the needs of the customer. Every month, you will merely need to pay the interest that is required by you, and not the additional principal amount. Furthermore, if you need to, you can even take an additional loan on top of the amount that you have already borrowed. Your loan amount is filled by the interest that you pay.
You can apply for an equity loan on up to 80% of what the estimated amount of your asset might be. For example, if you have a house whose value is $100,000, then you can apply for a maximum equity loan of $80,000. This is done so that if you are not able to pay back the bank for any reason and default on repaying your loan, then the bank will not go in any loss.