If your credit is poor and if you need cash in order to consolidate high interest credit card debt or even medical bills, a bad credit home equity loan is maybe on of your best options. This of course will require the person to own their own home, as this type of financing depends on using existing equity. It may be the easiest way for you to free up extra cash, pay off bills, consolidate debt, make home improvements, or to get money to use for any purpose that you may require a quantity of cash for. Find how they can help and some tips in getting a loan.
While it is true that many “mainstream” lenders, such Bank of America and Citibank, do not offer home equity loans to individuals with very low credit scores, you can get access to this source of funding if you do your homework. It will often involve talking to multiple lenders, submitting a few applications, and putting some research time in. It does take time to apply.
It is also true that many banks and lenders that will provide you with a poor credit home equity loan will offset the extra risk they are taking with you by charging you a slightly higher interest rate. So it can be a more expensive source of borrowing than those interest rates that are offered to borrowers who have a good credit rating and better credit scores. Find how to improve your credit scores. Continue.
However, you shouldn’t let a higher interest rate as the result of a bad credit home equity loan put you off though. It is an option, but closely review the terms and conditions in place. It may be a source of funds as the reason being that the higher interest rate you may need to pay from a poor credit home equity loan will still make this type of borrowing a better way of paying off debt that trying to raise cash than other methods.
Some home equity loans may charge you double digit interest rates, so as we noted this is may not be the cheapest source of money. However even if the interest rate you are charged for a bad credit home equity loan is above 10%, say in the region of 10 to 16 percent, it is still a much better deal in some cases. It can still be an option to consolidate debt (and save money at the same time) when compared to interest rates of say 20 – 25 percent that you may be paying on a credit card. In addition, there are tax benefits, as the accrued interest on all home equity loans, whether you have poor credit or great credit, is more than likely tax deductible.
How much you can borrow will depend on many factors. The amount of money that you will be able to borrow from a bank or lender for a loan will be determined by deducting the amount of money that you owe for your existing mortgage from the total, current, appraised value of your home.
The best way to find a poor credit home equity loan is to contact multiple lenders and banks. Contact everyone from Capital One, Chase to Bank of America. It may even be worthwhile to call upon a local bank or credit union. No matter who is contacted, ask how you can apply for a bad credit home equity loan.
Also, check with smaller lenders, as they are also likely to offer this product, though it may not be as heavily advertised. Always make contact with a large and wide ranging number of lending experts and banks to determine if they offer these loans. Or if they do not, ask if they provide any other alternatives to consumer’s with low credit scores.
When you contact banks and lenders, never be shy or hesitant to ask about their products and what they can do to help you. Sometimes you may also learn about other products that can help consolidate bills. Remember, you are the customer, and they want to offer you products and solutions to your debt problems.
One other benefit to using this approach is sometimes people are also surprised and learn that their credit isn’t as bad as what they thought it was, and as a result of contacting various lenders they manage to secure a lower interest rate then they though. The funds can help them consolidate their debts, and they are able to easily qualify for a home equity loan even without having perfect credit.
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