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Bad credit home equity loans.

If your credit is poor and if you need cash in order to consolidate high interest debt, a bad credit home equity loan is maybe on of your best options. The money can be used to pay down credit credit cards, high interest auto loans, medical debt or other expenses. The main goal is to use a loan, with a lower interest rate, to pay offer or reduce higher cost debt. Learn more on home equity loans below, including for people with bad or no credit.

The ability to take out a home equity loan, whether HELOC, personal loan, cosigner or something else, will require the applicant to own their own house, even if they have limited or poor credit scores. As this type of financing depends on using existing equity. If you own a home, 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.

How to get a bad credit home equity loan

While it is true that many “mainstream” lenders, such Bank of America and Citibank, do not generally 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. As their are lenders such as SoFi, Rocket, Upstart, Discover, or others that will help people get a home equity or subprime loan, or installment type product, even if they have bad credit.

There are also loans for homeowners that have bad credit from fintech companies, such as Paypal, Square / Block, Prosper, Fundera, and others. Or Buy Now Pay Later companies also offer funds to borrowers that have some form of home equity to borrow against. Learn more on Buy Now Pay Later no credit check loans.

Terms of bad credit loan interest rates

It is true that many banks and lenders, in particular national banks such as Wells Fargo, BofA, Citi and other 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.

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.

 

 

 

That being said, 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 other words, the interest rate for a home equity loan, vs. current debt obligations, is the key criteria.

Home equity loans have other benefits too. 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. These same advantages apply to subprime home equity loans as well.

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.

Apply for a home equity loan for people with bad credit

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. Also try online lenders such as Upstart, SoFi, Rocket Loans and others. 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 or credit unions, 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 for applicants with bad or limit credit histories 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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By Jon McNamara

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