There’s no worse feeling than not being approved for a loanbecause of your poor credit history. You don’t take out a loan for fun – you doit because you need money for an emergency or sudden expense. Bad credit canmake it feel hard or impossible to get the money you need.
But it isn’t impossible. In many cases, it doesn’t even haveto be hard to get a private mortgage. Privatemortgages with same day approval are possible, even with bad credit. Youcan use your home’s equity to help get a loan quickly.
This only works when you have equity, though. Your equity issimply the value of your home minus the amount of mortgage you owe. So if youhave a $500,000 with a mortgage balance of $300,000, your equity is $200,000.
It’s easy to get a personalloan online approval when it’s backed by your home equity, as the lenderhas the ability to get their money back if you aren’t able to make payments.Even with bad credit, they aren’t as concerned about losing money becausethere’s something of value they can take (a portion of the proceeds of yourhouse sale) if the loan falls through.
Another benefit of private mortgages is that the money canbe used for anything. Although the loan is secured by home equity, you don’thave to use the money on your home. You can pay off whatever other loans youhave, pay tax arrears, pay off credit cards, or even go on vacation (althoughwe’d never recommend using your loan that way).
Personal loans forbad credit without home equityare a lot rarer, harder to get, and more expensive than private mortgages forbad credit. Some examples of these types of loans are payday loans and cashadvances (assuming your credit card isn’t maxed out, and you already have one).Both of these are very high interest ways to access money, and can end upcosting a lot by the time you pay it off.
If it’s at all possible, always try to use your home equity beforelooking for other loans. They will always be cheaper and easier to get approvedfor.