When homeowners need cash quickly, they often turn to home equity loans for help. While they should be used cautiously (you are borrowing against your home, after all), a home equity line of credit (HELOC) can help you get out of a financial bind or even improve the quality of your life.

Here are four smart ways to spend your home equity.

1. Home Improvements

One of the main reasons homeowners take out a HELOC is to make improvements on their homes. And it makes sense – improvements equate to a higher resale value (in most cases).

But it's important to make sure that you're making the right improvements. Adding a big-screen TV to the living room won't increase the value of your home, even if you include it with the sale of the house.

Smart home improvements, ones that add to the value of your home, include:

• New paint

• New carpeting or hardwood flooring

• Kitchen and bathroom upgrades

Updating your 1990s kitchen with granite countertops and stainless-steel appliances will help attract buyers and boost the price of your home.

2. Pay Off Debt

If you're burdened by credit card, medical or education debt, a HELOC can help you wipe the slate clean for a fresh start.

Medical debt is a major reason why people turn to home equity lines. A HELOC can be used to pay off a wide range of medical debt, from surgeries to addiction treatment (not always covered by insurance) and complex medical treatments.

Paying off student loans with a HELOC is another smart way to make use of your equity.

But when it comes to credit card debt, you need to be cautious. Many homeowners use their equity to pay off debt and then run up the credit cards again.

Have a management plan in place if you're paying off credit cards, and be sure to consider the closing costs on the equity line to ensure that it makes financial sense to go this route.

3. Pay for Education

A HELOC may be a smart way to fund a college education. In many cases, the interest rate is lower than the rate on student loans, particularly in the private sector.

Paying for education with your home equity could potentially put you in a higher income bracket. But before you move forward, consider all of your options. Other loans may offer better terms and rates.

4. Invest

Some homeowners take out a HELOC and use the money to invest in the stock market or real estate. The expectation is that the return on investment will exceed the cost of the HELOC.

While this can be a smart way to use your home equity, it's important to remember that there are risks. There are no guarantees that the stock market will perform to your expectations. There are also no guarantees in the real estate market. What if the property turns out to be a dud?

Exercise caution when going this route and consider all of your options before diving in.