Safeguard against the malpractices of Secured home equity lender! - By: Kirthy Shetty

Secured home equity loan offers you the chance of releasing your hidden equity ties up in your home for so long. Utilize it, for a good purpose, such home equity loan are offered in two forms, home equity loan and home equity line of credit.

While a home equity loan offers you the loan in a lump sum amount and you repay back a portion of it every month with a fixed rate of interest as installments. Home equity line of credit lets you use the loan amount as your credit card where in you pay interest only on the amount you borrow. Consider the limit set up to which you can borrow under home equity line of credit.

People with bad credit history like County Court Judgements, arrears, defaults, bankruptcies etc. may also avail this loan type. The major advantage with such loans is that you get a chance to improve your credit history, which will help you in getting loans in future. The presence of collateral with this loan type helps in reducing the risk to the lenders. Therefore, the lender charges lower interest rates with secured loans. And if you are planning a major renovation in your home, then secured loans may meet your financial requirements up to a large extent.
Be mindful of various practices followed by lenders to fleece the borrowers:

Equity Stripping: A lender may encourage you to pad your income, although your income is low, you may be asked to write more in order to get your loan approved. Since you don’t have so much income, you will be unable to pay back the installments and the lender will confiscate your asset to claim your installment, so beware of this, don’t apply for loan amount which you can’t afford each month.

Frauds: Be mindful of loan sharks, which offer attractive loan offers. There are fraud lenders in the loan market, who may misuse your document details. Never forget to know about the lender’s past history and find out if he’s genuine or not.

Hidden loan terms: Don’t get duped by hidden loan charges. Read out the loan terms and conditions carefully before signing any documents.

Once you have safeguarded your self of against all these, reach out to a trust worthy lender, who has a good past history in lending home equity loans. There’s no restriction on the usage of the loan, you can use it for any purpose, right from wedding, education, business, debt consolidation to hospital expenses.

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