What is the primary purpose of a home equity loan?

The primary purpose of a home equity loan is to finance consumer purchases. Home equity loans allow homeowners to borrow against the equity they have built up in their property. This equity is calculated as the difference between the home's current market value and the outstanding mortgage balance. As homeowners tap into this equity, they can access funds that may be used for various consumer-related purposes, such as consolidating debt, making home improvements, financing education, or covering other expenses.

While purchasing a new primary residence, refinancing an existing mortgage, or donating to charity can involve financial transactions, they are not the main intent of a home equity loan. Instead, the focus is on leveraging existing home equity to provide funds for personal use, making option B the correct choice for the primary purpose.