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Can I Get a Home Equity Loan with Bad Credit?

Yes. Many lenders will consider your application for a home equity loan even if you have bad credit.

If you have County Court Judgments (CCJs), defaults, arrears or you have missed payments on loans or credit cards then you may have found it difficult to be agreed for credit. Many credit card companies and unsecured loan providers are reluctant to lend to people who have experienced credit problems in the past.

In addition, banks and building societies are increasingly adopting strict lending criteria for remortgages which means that applications from people with bad credit are often declined.

However, as a home equity loan involves offering your home as security, many lenders are prepared to agree a homeowner loan to applicants with less than perfect credit.

A bad credit home equity loan lets you borrow a sum of money secured against the equity in your home. In return, your home is taken as security by the lender which means that your home could be at risk if you don’t keep up your repayments.

As home equity loans are secured on property you will often find that the interest rates charged on such loans are lower than other types of borrowing. Your interest rate will generally be determined by the ‘loan to value’ (the proportion of your home’s value that you want to borrow) and the extent of the credit problems you have experienced. The more serious your credit issues, the higher the interest rate you will generally pay.

You can use your home equity loan for almost any purpose. Many people use a secured loan to consolidate other debts that they have such as credit cards or personal loans. Others use a home equity loan to pay for a one off item such as a new car or a wedding or use the funds to undertake home improvements.

Another advantage of taking out a home equity loan if you have bad credit is that it can help you repair your credit rating. If you make payments to your homeowner loan on time every month it will demonstrate that you are capable of managing debt responsibly. This will improve your credit rating and will improve your chances of being agreed for credit in the future.

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