Equity for an individual or a business is defined as the total assets minus the total liabilities. For instance, when a borrower has a loan against property, the equity of the borrower is determined by the amount he or she has already paid. The current value of the property is estimated, and the amount owed as loan is subtracted from the value. This amount is considered the equity of the borrower. A line of credit is defined as the maximum amount of money that a person can borrow from a financial institution without requiring any additional approval. The lender determines it on the basis of two major factors namely the credibility or credit worthiness of the borrower and earning power. Quite often, these calculations are quite complicated and both borrowers and lenders turn to equity line of credit calculators.Equity line of credit calculators help borrowers find out the extent of credit they can obtain from their lenders. To calculate this, the borrower has to find out the maximum, combined loan-to-value (CLTV) ratio. The loan to value ratio is calculated as the percentage of the property’s appraised value that the lender will lend the borrower. The loan, in this case, is the sum of the proposed credit line, plus the balance of any outstanding mortgage debt. Value is defined as the current market value of the property, which is generally assessed by an independent appraiser.Equity line of credit calculators also allow the borrower to assess whether debts need to be consolidated. Consolidation of debts means combining all existing debts into one loan. This may help the borrower gain a more favorable interest rate. Borrowers typically enter the number of months needed for repayment and the calculator displays the monthly payment, savings in interest expense, any tax-related savings and the total cost savings.An equity line of credit calculator helps a borrower decide a cheaper financing source for an auto loan or a home equity loan.