The homeowner may want to look into three different types of loans. Mortgage refinancing (or cash out consolidation refinance), second mortgages, and home equity loans are usually easier to get than a personal bank loan since there is a tangible asset, the home, to secure the loan.Usually, the most flexible are home equity loans.
They are taken against a proven tangible commodity, the equity built up in the home. The money released from the home equity can be used for anything. The problem lies in this flexibility, however. There will be a complicated list of options concerning variable or fixed interest rates and effects on a primary or secondary mortgage. They can also be structured as a line of credit against the home equity. The very flexibility of a home equity loan means you will have many important decisions to make.
Mortgage refinancing and second mortgages may be more straightforward. For these, you must evaluate the current interest rates and terms that you can get, and carefully calculate whether or not you will actually be saving money in the long run. There is even a chance that you can incorporate credit debts and other debts into the new mortgage (if you get a good enough rate to make that worthwhile). In recent times, lenders have begun to frown on second mortgages, making them more difficult to get.
If you do not have a house to secure a loan, do not despair. You you may want to be looking at private debt consolidation loans and personal loans. These are fundamentally the same thing, but differ in that a debt consolidation loan is worked through a bank or debt services company while a private loan is worked by you personally. They also differ in that a debt consolidation loan declares intention on your part to pay off debts, while a personal loan is, well, personal. Of course, your credit rating will have a great effect on your ability to secure such a loan. As always, shop for the best credit terms and carefully calculate whether or not you will actually be saving money in the long run. As a rule of thumb, without collateral the requirement for a better credit score tends to increase.
The options may seem bewildering, but the benefits are high if you can successfully find out how each of the loans for bad credit would or would not benefit you. Only you really know your unique personal situation, and you have to choose the option that you feel works best for you.
You may want to consult with a debt services company for free initial consultation for further options. As with any firm, credit-yogi would like you to always remember that they are giving you advice not instructions, and all final decisions rest with you.