Bad Credit Equity Loan

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.

Bad credit equity loans are usually the best and easiest way to get cash if you have poor credit and you need some money to consolidate high interest credit cards, make home improvements, or similar situations when you need cash.

Typically the amount you can borrow for a bad credit home equity loan is calculated by deducting the amount you still owe on your existing mortgage from the current value of your property.

Most mainstream mortgage lenders don’t offer bad credit home equity loans due to the risks associated with them. Lenders that offer bad credit home equity loans typically offset the high risk by charging a higher interest rate than those rates offered others with a good credit rating.

Whoa – higher interest rates??  Don’t let this scare you – the higher interest rate applied to a bad credit home equity loan still makes this a better way of getting cash than other methods.

The best way to look at it is – even if the interest rate for a bad credit home equity loan is 9 to 18 percent, it’s still better than paying ridiculous rates of 19-35% for credit cards. The other benefit is that accrued interest on a bad credit home equity loan is typically be tax deductible unlike credit card interest that’s not.

Keep alert for a wide variety of loan scams – you need to protect yourself and your money from fake lenders and scam artists alike. Ensure that you read about the latest scam techniques, such as these scammers using company names and logos that they took from real loan companies so that they can hide the scam operation. Also take the time to learn about foreclosure fraud, phony debt counselors, advance fee loan scams, and identity phishers – they all tend to fall into the same group and you can usually spot them easily if you take the time to learn their possible schemes. Once you’ve done enough research, you can steer clear of scam artists and operations easily. If you happen to find yourself scammed, immediately report it to the Federal Trade Commission and law enforcement. Those two organizations will be your first line of defense and your best bet for not only saving your money, credit, and identity, but also putting the scam artists behind bars.

It’s a dangerous world out there…being prepared is a necessity – especially in these economic times