Beware if you encounter a lender who offers no credit check equity loans.. Anytime a borrower applies for a line of credit or loan, the lender is under law obligated to check the credit history of the borrower.
Since large sums of money are involved in equity lending, it presents potential risk to both borrower and lender. The lender may lose if the borrower fails to meet payment obligations and borrower will lose his/her home if payments are missed. Thus, when considering equity loans and spotting the “bad credit, no credit check, no problem” loans, you should precede with caution, since some of the lenders are taking advantage of the less fortunate.
Payday lenders often extend minimal loans to consumers without checking the credit of the client; however, mortgage lenders are under obligation to check credit. Many of the lenders who offer bad credit loans often provide debt consolidation leading the clients to believe that they are on their way out of debt. Once the borrower steps into the snare, he/she soon learns that debts are increasing instead of reducing. Furthermore, some of the lenders of home equity loans present a similar trap, luring the clients in to a web of debt.
Once the client agrees to the contract hidden, fees are added to the monthly installments and the client soon learns he cannot meet his monthly obligations. Therefore, when considering home equity loans be sure to do a thorough background check on the lender and company offering the loan. Read the terms and conditions, including any fine print the company has included on the contract if you want to avoid uncontrollable debt.
Remember, your home is at risk, so proceed with extreme caution if you do not want to haphazardly venture in financial ruin.
Now click here for tips about the difference between an equity line and a loan.