Looking for a home equity loan to splurge on summer vacation? To pay for the upcoming fall tuition for your college student? To buy a shiny new car or lease a sassy BMW for as little as $360 a month?

If you answered yes to any of these questions, you're in the minority. A new study of home equity loans for the Consumer Bankers Association found that 40 percent of people who opened a home equity credit line last year planned to use the money to consolidate the debts they already owe.Throughout most of the '90s, only 30 percent to 36 percent were using their home equity credit lines to pay off other debts. But last year, when a record 1.3 million people declared bankruptcy, the bill consolidation number jumped to 40 percent for the first time - another sign of the overwhelming debt loads many households are carrying.

Paying off debt with a home equity loan makes good financial sense for some families. Generally, you get a tax break for the interest you pay on home equity loans but no break on credit cards, car loans or other debts.

On the other hand, if you dump all your debt onto a home equity line and then run up credit card bills again, you may be on the road to financial ruin. A major setback could lead to the loss of your house, not just your credit cards.

Weighing these benefits and dangers, more potential borrowers last year focused on the up side. The Bankers Association reported that home equity loans increased 11.6 percent in 1997.

If you're in the market for such a loan yourself, the CBA's study has good news for you - interest rates on home equity lines of credit have fallen and so have closing costs.

The study found that the average interest rate charged for a home equity line of credit was 1.27 percent over the prime rate last year compared with 1.41 percent over prime in 1996.

Since the prime rate is now at 8.5 percent, that would put the interest rate you pay at 9.77 percent. If you're paying a higher rate than that already, check around with area lenders or look in the business section of local newspapers and you might find a better deal.

In some competitive areas, lenders are offering home equity loans right at the prime rate - just 8.5 percent - and promising the rate won't change unless the prime itself rises, which isn't likely to happen unless inflation heats up.

Such a deal generally is much better than a teaser rate - such as 3.9 percent - that lasts just six months, then reverts to 9 percent or higher.

When you're looking for a home equity loan, also compare closing costs. The CBA study found that 80 percent of home equity borrowers had most of the fees waived last year. The fees actually paid averaged $216, down from $346 in 1996.

And here's where the borrowed money went: Debt consolidation, 40 percent; home improvement, 23 percent; automobile, 7 percent; education, 6 percent; major purchase, 6 percent; investment, 3 percent; household expense, 2 percent; business expense, 2 percent; vacation, 1 percent; medical, 1 percent; other or don't know, 9 percent.