Bad Credit Equity Home Loan | What To Look For
Do you have bad credit? Find an equity home loan here
If you have bad credit but need to borrow money then a bad credit equity home loan could be for you. A bad credit equity home loan would be suitable for someone with a poor credit history who has equity in their property and wants to remortgage.
You have bad credit if you have previously defaulted on loan or credit agreements, have County Court Judgements (CCJs) against your name, are subject to an individual voluntary arrangement (IVA) or have previously been declared bankrupt.
Banks and other financial institutions are wary of lending to people with bad credit so a bad credit equity home loan might be your only option.
What rates can I expect to pay?
Most companies who will offer a bad credit equity home loan do so on varying rates depending how bad your credit rating actually is, for example light, medium or heavily adverse. Industry experts suggest that somebody with a CCJ against them with no further debts would be classed as 'light'. Someone with a string of CCJs against their name and a history of missed credit payments would be medium or heavy adverse.
A bad credit equity home loan could be suitable for you if you own your own property and you have equity in your home, that is the property is worth more than the mortgage or other outstanding debts secured on it. You can use a bad credit equity home loan to remortgage either to a better interest rate or to release some of the equity in the property.
Once you have taken out a bad credit equity home loan you might be able to improve your credit record. If you make your payments on time for a certain length of time, the next time you need to borrow money you might not need a bad credit equity home loan, you will be eligible for a mainstream loan instead as your credit record will be improved.
Is a bad credit equity home loan suitable for me?
A bad credit equity home loan will be secured on your property so these loans are for homeowners only regardless of whether the property is mortgaged or owned outright. If you default on the bad credit equity home loan then the lender might be able to repossess your house, so think very carefully about whether a bad credit equity home loan is the right option for you. Can you afford to lose your home?
The fact that you own a property with equity in it means you will be able to apply for a bad credit equity home loan. If you don't own a property then you will only be eligible for a bad credit unsecured loan.
A bad credit equity home loan works like a debt consolidation loan or remortgage. You effectively use your bad credit equity home loan to reorganise or simplify your finances, pay off other debts, free up cash, and benefit from better terms and conditions on your loan such as lower APR or longer or shorter repayment period, depending on what you need.
