A Home Equity Line of Credit (HELOC) loan is a line of credit secured against your home. It is a cross between a home equity loan and a credit card. Some consumers prefer HELOCs to home equity loans because they are convenient and flexible.
For example, if you get a $25,000 Home equity loan and use it to renovate your home or pay off your debts - once the $25,000 is spent, your cash is gone even after you have paid back the loan. With a $25,000 HELOC, if you spend $20,000 of the $25,000, you will still have a credit line of $5000 to spend. If you pay off the entire balance of $20,000, your credit line is reset back to $25,000, leaving you with considerable flexibility when it comes to your finances.
If you have bad credit and you need a HELOC loan, you will first need to understand whether you have equity in your home. To do this calculate your home's equity by taking your home's appraised value minus your current mortgage loan. If your home is appraised at $250,000 and you still have $225,000 on your home mortgage loan then you have $25,000 equity in your home. You can turn this equity into a $25,000 HELOC.
Do you have equity in your home?
If the answer is "yes," then you can start researching subprime HELOC loan lenders. The internet has opened up a world of options for all consumers regardless of credit history so don't hesistate to take advantage of legitimate companies that offer free loan quote services. This advise bodes true for all consumers, whether you have less-than-perfect credit or great credit. Why settle for one option when you can compare 4 or 5 HELOC loan programs?
Start your research by reviewing recommended Home Equity Line of Credit (HELOC) Lenders, who cater to people with bad credit. These companies offer multiple HELOC options based on your loan application.
Sharon Listner writes about family finances. Visit http://www.kstreetloans.com for more information about home equity loans and home equity lines of credit (HELOC) for consumers with bad credit.
