Types Of Collateral For Secured Loans - Getting a Home Equity Loan With Low Credit Scores

You don't have to have perfect credit to get a loan. If you're a homeowner--or the owner of a valuable asset--you can get a Secured Loan. Your asset will be used as collateral, and if you default on the loan, your lender can take your asset and sell it to cover the cost of the amount you borrowed. Secured Loans often appeal to folks with low credit scores, since even bad credit borrowers can usually qualify. One type of secured loan available to homeowners is a Home Equity Loan. Here's how it works:

THE HOUSE IS COLLATERAL:

You tap into your home's equity--the value of your house minus any amount you still owe on the mortgage--and receive a lump sum of cash in return. You must make monthly payments on the loan until it is paid off, or you risk forfeiting your home. Essentially, your loan is "secured" with your house.

THEY'RE OFFERED BY MOST LENDERS:

These types of loans are available from many lenders, including your bank, your current mortgage holder and online loan companies. When searching for a Home Equity Loan lender, it's always wise to shop around to find the best deal. Your current mortgage lender may not be offering the lowest interest rates or the lowest fees. Compare costs between multiple lenders, including both regular brick-and-mortar banks and online loan companies.

THEY'RE AN INEXPENSIVE LOAN:

In general, Home Equity Loans offer low interest rates. They're almost always the cheapest Secured Loan, offering lower rates than personal loans or loans that have been secured with a different type of collateral, such as a car or jewelry. Moreover, in many states the interest you pay on a Home Equity Loan is tax deductible at the end of the year, which also helps lower the cost.

A Home Equity Loan is an example of a Secured Loan that uses your house as collateral. Before you borrow, however, you should be certain that you will be able to make the minimum monthly payments, since you may forfeit your home if you default on the loan.

ABC Loan Guide also has information if you are a Bad Credit Mortgage Loan Applicant or want to Compare Home Equity Loan Rates.

Home Equity News:

Bing: home equity site:msnbc.msn.com
Search results

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Like many homeowners during the housing boom, Lynnette Madden and her husband decided to open a home equity line of credit about a year and a half ago as ...
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WASHINGTON ? Falling U.S. home prices have shrunk equity so much that the proportion of their homes that Americans actually own is near its lowest point ...
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Home equity lines have dried up across U.S. As home prices collapse, banks cut off credit, further souring the economy Below:
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Many Americans have recently found themselves changing retirement plans after losing a substantial amount of home equity as the housing market and the ...
Equity in Americans? homes falls to historic low - Business ...
NEW YORK ? The equity Americans have in their most important asset ? their homes ? has dropped to its lowest level since the end of World War II ...
Students get creative to pay off loans - Business - Personal ...
Lines of credit typically work like a credit card, with a limit and a revolving balance: the average home-equity line of credit currently has an interest rate ...
Use of home equity hits a four-year low - Business - Real estate ...
Use of home equity hits a four-year low Freddie Mac report cites falling residence values, stricter lending standards Below:
Ford, Toyota are pinning their hopes on China - Business - Autos ...
NEW YORK ? Ford Motor Co. plans to build a new assembly plant in China ... $30K home equity loan FICO: 5.75%
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These stem from lost tax revenue and jobs as well as slower consumer spending that come with home equity declines, and don?t even include the financial toll ...

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