It is not usually the first possibility that comes to mind when we seek financing and less talk about it. Traditional loans, fast loans, and mini-credits are much better known. However, on some occasions it appears as an ideal alternative, especially for those people who request a high amount, but their income is not excessively high.
These are home equity loans, and they have three characteristics that make them a more than interesting option. In this article we review them and take a look at other key aspects of this financing.
What makes home equity loans special?
The first thing that we should know about this type of credit is that they require owning a house, an apartment or a premises, since it will be what acts as a guarantee of payment. If it is not our case, we are automatically discarded to get the money. The fact that a property is involved is what allows access to high amounts. The problem, on the other hand, is that in the event of default the lender would keep the house or apartment owned to collect the outstanding debt.
For this reason, we always recommend that we make sure to request a home equity loan when we are certain that we will be able to meet the resulting fees. Otherwise, it is better not to request it, since the consequences can be very negative. At the same time, we also highlight the need to resort to this solution when the amount we require is high. There is no point in putting the ownership of our house at stake for a relatively low amount.
3 keys to these loans
Already explained some precautions that must be taken into account with home equity loans, we can now go to the good part and review what are the three great advantages of this type of financing:
- Accept: it is not the ideal situation, but there are various events that can lead us to be registered in delinquent files. In this type of loan, this circumstance is not taken into account, while in many cases it automatically eliminates the option of obtaining credit.
- Diversity of purposes: its use is very varied. We can use it to refinance, to reform our home or to accept an inheritance, among others. The great variety of amounts it covers facilitate this possibility.
- An extra opportunity: any bank or entity will ask us for a minimum income to access financing. Sometimes that required amount can be too high. Luckily, with home equity loans, lenders are somewhat more flexible because the home is acting as collateral for payment.
With this private capital company we can request from 5,000 to 300,000 dollars (or 50% of the value of the property) to return them within a period of between 6 months and 20 years. In addition, it has a very competitive minimum interest of 8.95% TIN and allows you to have the requested money in just one week.