Step 1: Watch an Overview Video

Step 2: Learn Which Option Fits Your Needs

Life is full of major expenses. College tuition, unexpected and pricey home repairs and medical bills can set you back financially. Well, here's some good news -- if you own your home, consider obtaining either a home equity line of credit or a home equity loan. Both allow you to access funds as you need them.

Equity is the difference between your home's appraised value and the outstanding balance on your mortage. Even if you've owned your home for only a short time, you've probably created equity, particularly if you made a sizeable down payment.

A home equity line of credit is a form of revolving credit in which your home serves as collateral. It basically operates like a credit card. You can borrow up to a certain amount over the life of your home loan, tapping into it as needed. As you pay off the principal, your credit line is replenished.

A home equity line of credit typically has a variable interest rate that's based on a publicly available index.

If you need a sizable amount of money at one time, say for a renovation, a home equity loan may be a better choice. You'll be approved for a specific amount and will receive it in one lump sum. A home equity loan typically has a fixed interest rate and is paid back in pre-determined monthly payments over the life of the loan.

The beauty of both a home equity line of credit and a home equity loan is that interest payments are usually tax deductible. This can be an attractive feature for someone trying to consolidate bills and pay off debt.

Be sure to consult your tax advisor to review your situation, but before you decide which option is best for you, do your research. There are several sources that can answer questions and walk you through the process, either online or over the phone.

So the next time a major expense comes your way, don't panic -- consider a home equity loan or line of credit.