A home equity loan is a type of loan in which the borrower uses the equity in their home as collateral which creates a lien against the borrower’s house. Home equity loans are most commonly second position liens (second trust deed), although they can be held in first or, less commonly, third position. Most home equity loans require good to excellent credit history, and reasonable loan-to-value and combined loan-to-value ratios. It is sometimes possible to deduct home equity loan interest on one's personal income taxes.