| You don't have to have perfect credit to get a loan. If | | | | These types of loans are available from many lenders, |
| you're a homeowner--or the owner of a valuable | | | | including your bank, your current mortgage holder and |
| asset--you can get a Secured Loan. Your asset will be | | | | online loan companies. When searching for a Home |
| used as collateral, and if you default on the loan, your | | | | Equity Loan lender, it's always wise to shop around to |
| lender can take your asset and sell it to cover the cost | | | | find the best deal. Your current mortgage lender may |
| of the amount you borrowed. Secured Loans often | | | | not be offering the lowest interest rates or the lowest |
| appeal to folks with low credit scores, since even bad | | | | fees. Compare costs between multiple lenders, |
| credit borrowers can usually qualify. One type of | | | | including both regular brick-and-mortar banks and online |
| secured loan available to homeowners is a Home | | | | loan companies. |
| Equity Loan. Here's how it works: | | | | THEY'RE AN INEXPENSIVE LOAN: |
| THE HOUSE IS COLLATERAL: | | | | In general, Home Equity Loans offer low interest rates. |
| You tap into your home's equity--the value of your | | | | They're almost always the cheapest Secured Loan, |
| house minus any amount you still owe on the | | | | offering lower rates than personal loans or loans that |
| mortgage--and receive a lump sum of cash in return. | | | | have been secured with a different type of collateral, |
| You must make monthly payments on the loan until it | | | | such as a car or jewelry. Moreover, in many states |
| is paid off, or you risk forfeiting your home. Essentially, | | | | the interest you pay on a Home Equity Loan is tax |
| your loan is "secured" with your house. | | | | deductible at the end of the year, which also helps |
| THEY'RE OFFERED BY MOST LENDERS: | | | | lower the cost. |