A home equity loan is probably the best and easiest way to free up cash if your credit is poor and you need money to consolidate high interest credit card debt, make home improvements, or any other purpose that you require a sum of cash for.
The amount that you will be able to borrow will be calculated by deducting the amount of money that you still owe on your existing mortgage from the value of your property.
Most mainstream lenders do not offer bad credit home loans. Those lenders that do offer bad credit home equity loans will offset the extra risk they are taking on by charging a higher interest rate than those rates offered to borrowers who have a good credit rating.
You shouldn’t let this put you off though as the higher interest rate applied to a bad credit home equity loan will still make this type of borrowing a better way of raising cash than other methods.
Even if the interest rate for a bad credit home equity loan is in the region of 10 to 16 percent it is still a great deal when compared to interest rates of 20 – 25 percent on a credit card. You should also keep in mind that accrued interest on a bad credit home equity loan could be tax deductible in a lot of cases unlike credit card interest costs!
You should always consult with a good number of lending experts to see if they offer bad credit home equity loans to ask if they provide this solution and whether or not they will be able to help you based on the level of your credit.
NEVER be worried about discussing better options with a lender, and always remember that you are the customer. You may also get a surprise and find out that your credit isn’t as bad as what you first thought and as a result manage to secure a lower interest rate than you thought you would!
