First you need to figure out how much equity you have in your house. Typically you can base your home’s equity on the sales price or an appraisal price if you have one completed. You’ll need to check the papers you received when you purchased your home for these prices. Now you need to check one of the the most recent loan statements. Simply subtract the current loan balance from the total value of your home and you’ll get approximately how much equity you have.

Next you need to create a budget so that you can figure out what you can afford. Get your total net income, calculate your total monthly expenses, and subtract the expenses from the net income. Most people keep the expenses in a checkbook, Quicken, or simply online in a bank statement. It’s best to use the average monthly expenses for a year instead of just one month since they change. You can get this by adding your total expenses for the past year and then divide that number by 12. Now you can figure out how much of your income is available outside of your regular expenses by subtracting the average monthly expenses from your monthly income.

Now you need to determine how much you can really afford to borrow from the bank. Most people find that the easiest way to do this is with a home equity amortization calculator. Another way is to use a physical book that has amortization values in it. See what the potential home equity loan amount is, interest rate, and the term you want in months. Mpst equity loan rates run between 6 and 17%, and are usually higher for people with bad credit (I’m assuming you already understood the rates would be higher). Most lenders will typically only finance up to 80% of your home’s equity, but some will go as high as 90%. Look at what the monthly payments would be for the loan you want and see if your budget would allow you to make the monthly payments. Whatever you do – don’t get an equity loan without having the monthly income to support it.

Let’s say you need to borrow money fast, but your credit isn’t good -  there are very few places that you can get help.  You can get a bad credit secured loan, but if you don’t own a home or have some residence with equity you only have a few choices: either an unsecured or a secured personal loan. Typically a low-interest unsecured personal loan can be hard to get, but there are resources that grant higher-interest loans -  both secured and unsecured.  Your credit history will obviously come into play here and bad credit is where the challenge is at.  Here are a few ways to get a secured loan when you have bad credit:

Title loan companies – you can easily get a fast guaranteed loan on your car by simply putting a lien on your car. The title loan company basically holds your car title while you continue to use the car. Of course this only works if you own the car free and clear of any loans since that’s the only way you’ll have the title. Now the amount they give you will depend on the age, condition and type of car, but the loan will typically be more than about half of the vehicle’s value. Typically these loans are payable within 30 days and the interest rate can be as high as 25%, which is crazy. So if you’re willing to pay what equates to an annual percentage rate (APR) of 300%, then go for it. If you don’t pay the loan back, they can possibly take your car.

Pawn shops – this is a long standing form of company that is used to making short-term and low amount loans. All that you need to do is bring in your personal property such as a guitar, stereo, or other items of value.  Then one of the pawn brokers will appraise it on the spot and loan you some money against it. They usually keep the loan term at 30 days and fees tend to be high, but you’re guaranteed to get money. If you choose to not pay it back accidentally or on purpose, the pawn shop is permitted to display it and sell it.