An Adverse Credit Homeowner Loan Could Be Your Best Option If You Have A Bad Credit Score

Posted by Nick Niesen on October 29th, 2010

If you have had problems with credit in the past and have tried to get a personal loan then you have probably found yourself being turned down time after time. If this is the situation you are in then applying for an adverse credit homeowner loan could be the answer to your problems. A loan of this type can be taken out for almost any reason and the repayments can be extended over many years.

You do have to choose your loan carefully as while there are now many lenders that will offer adverse credit loans, these usually come with very high rates of interest. However by taking out a secured loan you are able to lower the rates of interest, the downside is that you will have to put up your home against the amount that you wish to borrow as collateral.

One of the easiest ways of getting access to the whole of the market place and of being sure of getting the cheapest rates of interest and the best deal is to go online with a specialist website. A specialist website will be able to search around on your behalf with the top UK lenders and then deliver the best deals to you along with the key facts so that you can read what the loan entails.

The key facts hold the small print of the loan and this will tell you of any costs which could be added onto the loan along with the rate of interest you will pay, how much interest will be added on and how much the total loan will cost. It is essential that you do not just compare the APR of the loan but also the terms and conditions because this can make a huge difference to the loan and for a clear picture you need to make good use of all this information. Loan protection can be added onto the cost of the loan without you realising it, although many lenders have now changed their ways and offer it but do not add it, it would be wise to check your loan.

An adverse credit homeowner loan means that you will put up your home as security against the money you are going to borrow and because of this the rate of interest will usually be lower. However due to this your home will be at risk until you have paid off the loan so it is essential that you make sure you can afford the loan repayments and have taken into account that circumstances might change. The amount of money you are able to borrow on a homeowner loan will depend on the amount of equity that is in your home. The equity is worked out by taking the value of your home and then deducting what is left outstanding on your mortgage, so the more of your mortgage you have paid off, the more equity you will have to borrow on. Some lenders will allow you to borrow up to 125% of the equity but for this you can expect the rate of interest to be high.