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Why a Home Equity Loan?

If you’re looking for an affordable, straightforward and easy way to borrow money, a home equity loan could be the perfect solution.

A home equity loan is a loan that is secured on your property. It allows you to borrow some or all of the equity in your home by offering your property as security.

Home equity loans are easy to arrange

The application process of a home equity loan is simple and straightforward and you can often apply for a loan online. If you are a homeowner and meet the minimum age requirements (typically 18 or 21) then you can apply for a homeowner loan.

You will have to complete an application form and the lender may need to see some identification and proof of your earnings. Once your loan is agreed, you will typically have the money within 2-3 weeks.

Home equity loans allow you to borrow large sums over a long period

One of the main advantages of a home equity loan is that it allows you to borrow a large sum of money over a long period. Many personal loans are for smaller amounts and paid over a maximum term of around 3-7 years. However, home equity loans can be for sums in excess of £100,000 and you can pay them back over a term of 25 years.

Home equity loans can be cheaper than other types of credit

A home equity loan is secured on your property. This means that if you fail to keep up your repayments, a lender can apply for a repossession order to repossess and sell your home in order to recoup their money.

As a lender has this additional security they can lend the money at a lower interest rate than riskier types of borrowing such as unsecured loans or credit cards. This frequently makes home equity loans cheaper than other types of credit.

Home equity loans can be used for a wide range of purposes

A home equity loan is a great way of borrowing a cash sum for almost any purpose. You can use a home equity loan to:

  • Consolidate other debts such as credit cards, overdrafts, personal loans or store cards
  • Undertake home improvements such as a new kitchen or bathroom, an extension, a loft conversion or new windows and doors
  • Pay for a one off purchase such as a dream holiday, new car or caravan
  • Buy a second home, a foreign holiday home or an investment property
  • Pay for a wedding or honeymoon
  • Help your children through university or college

In addition, home equity loans can help you move home. If you are finding it difficult to sell your current home, you can use a home equity loan to access the equity in your property. This will let you raise the deposit you need for your new purchase.

You can then rent out your existing home and move house. The rental income will help you repay your existing mortgage and the home equity loan. And, you can sell the property and repay the home equity loan in the future when the property market may have improved.

Home equity loans can help you keep control of your household finances

If you have lots of unsecured debts then it might be tough to keep control of your spending on a monthly basis. Making lots of payments and dealing with multiple creditors can be time consuming and confusing.

A home equity loan allows you to raise a lump sum to consolidate your other debts. Instead of making lots of payments to a number of creditors, you will be left with one loan, one monthly repayment and one direct debit. It’s a much easier way to keep control of your finances.

Home equity loans can be agreed if you’re self employed

If you’re self employed then you might have found it difficult to be agreed for credit. You may have been declined for a personal loan or credit card simply because you run your own business.

However, as a lender has the security of your home when they agree a home equity loan, it can be a great way of raising cash if you’re self employed. And, a homeowner loan can be a good way of raising capital to fund the expansion of your growing business.

Home equity loans can be agreed if you have bad credit

Lenders have been increasingly reluctant to lend to people with bad credit over the last few years. If you have a County Court Judgment or default, been subject to bankruptcy or an Individual Voluntary Arrangement or even if you have missed payments on loans and credit cards you may have been declined for credit.

However, home equity loan applications are welcomed from people with a less than perfect credit history. Bear in mind that you may pay a high interest rate for the loan than someone with a clean credit history.

To access the money tied in your home equity and get a great loan rate, fill our loan form on the right now.