Will a Home Equity loan or a personal loan work better for you
If you are short on cash there are a couple of ways you can look into to get some into your pocket. If you have good credit you could apply for a personal loan and borrow against your good credit history and reliability. If you are a homeowner and have some equity built up in your home you could borrow against that in a couple of different way. You could apply for either a home equity loan or a home equity line of credit.
A couple of important features that might determine the way you want to borrow your money might be whether the loan is fixed or has an adjustable rate and if the term of the loan and pay-off dates are set. A home equity loan and home equity line of credit are both made with the value of your home in mind. They borrow against the equity in your home but are for a shorter term than your first mortgage. A home equity loan is a one-time lump sum that will usually need to be paid off over a certain amount of time. It will probably have a fixed interest rate and the same amount for a payment each month. If you secure a home equity line of credit you will be able to borrow against it for a set amount of time but you will be able to draw against whenever you need money and more than once. Lines of credit are accessed by checks drawn from the account or by using a credit card. The balance rotates up and down as you borrow money and pay it off. Most lines of credit have a variable interest rate that goes up or down over time. Payments vary on the interest rate. When the life span of the line of credit has expired the entire amount will need to be paid off.
A personal loan, also called a consumer loan, can be secured or unsecured by the asset it is used to purchase. You may be required to use a co-signer that guarantees the loan will be paid off if you cannot do so for some reason. All personal loans and non secured loans will have unique guidelines and restrictions, based on the area you live in. The loan is made for a set amount and is usually paid back through a fixed amount over a fixed term.
The type of loan you decide to get depends on the terms you are looking for. You will have to decide whether you want a fixed term or an adjustable percentage rate and learn what the current interest rates are. You may also want to know if interest rates are going up or down. An adjustable rate loan works well when interest rates are down as long as you remember that they can go up or down, which means your payment, will too, at any time.