When you need to borrow a substantial sum of money, like $100,000, the financing options available to you can dramatically impact your wallet over both the short- and long-term. After all, the interest rate you secure on a loan today will determine what you pay for interest charges on your future payments. In this inflationary environment, though, borrowing costs are elevated across the board, so it can be tough to find an affordable option. For example, the average credit card rate is sitting at nearly 22%, so if you're borrowing without paying off the balance in full each month, you may find yourself saddled with more debt than you can afford.

If you're a homeowner who needs to borrow money, however, there may be an attractive path to low-cost borrowing via a home equity loan. These types of loans allow you to borrow against the equity you've built in your home, and they have become an increasingly popular option in today's borrowing landscape, as borrowers can use them to access large amounts of money at an affordable rate. The funds can also be used for nearly any purpose. That makes them a good alternative to personal loans, which also come with lower-than-average rates in today's landscape.

But if you're borrowing $100,000, is a personal loan or a home equity loan the more affordable option? Below, we'll break down the numbers to see which option truly comes out ahead this July.

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$100,000 home equity loan vs. $100,000 personal loan: Which is cheaper this July?

In general, rates on both home equity loans and personal loans are fixed. That means the rate you lock in when you take out the loan is the rate of interest you'll pay over the life of the loan unless you choose to refinance in the future. That can be a big benefit in an uncertain rate environment, like the one we're facing today, as your borrowing costs won't be impacted if rates climb in the future.

And, right now, home equity loans come with fixed average rates , depending on the loan term length. On the other hand, the average personal loan rate is . Here's how the costs of a $100,000 loan would compare between the two if you were to borrow at today's average rates:

• 5-year $100,000 home equity loan at 8.28%: $2,041.07 per month
• 5-year $100,000 personal loan at 12.65%: $2,257.43 per month
• 10-year $100,000 home equity loan at 8.43%: $1,236.12 per month
• 10-year $100,000 personal loan at 12.65%: $1,472.53 per month
• 15-year $100,000 home equity loan at 8.37%: $977.13 per month
• 15-year $100,000 personal loan at 12.65%: $1,242.30 per month

The monthly savings alone tell a compelling story. Even with the shortest-term home equity loan, you'd save about $216 every month compared to a personal loan, which tallies up to nearly $2,600 per year. Over the full five-year term, you'd save almost $13,000 in total interest by choosing the home equity route.

Were you to opt for a 10-year home equity loan route, you would save about $236 each month compared to a personal loan with the same loan term. That equates to annual savings of about $2,832 each year. Over the full loan term, your savings would be over $28,000.

But the real eye-opener comes when you consider longer repayment terms. Opting for a 15-year home equity loan over a 15-year personal loan would allow you to save about $265 each month. That equates to annual savings of about $3,180 each year — and a total savings of about $47,700 over the 15-year loan term.

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The bottom line

For homeowners with adequate home equity, the choice between a $100,000 home equity loan and a $100,000 personal loan is financially straightforward: The home equity option delivers substantial savings both monthly and over the life of the loan. However, the decision between these two loan options involves more than just numbers. You should also consider whether you're comfortable with the risks that come with using your home as collateral as well as your need for flexible repayment terms and whether you meet the borrowing requirements for each option. If you're confident in your ability to repay and want to minimize borrowing costs, though, the home equity loan represents a clear winner in today's rate environment.