Are Home Equity Loans Beneficial for Blacklisted Individuals?
Posted by financial advisor on
Among the various types of loans for blacklisted individuals, you will find home equity loans. You should take a closer look at them before you decide to use one for improving your financial situation.
Home Equity Loans: Pros & Cons
With home equity loans, you borrow money against the equity that you own in your home. The maximum amount of money lenders extend is usually 85% of the value of the property minus any outstanding mortgage debt. If you default on the repayment of the loan, the lender will have the right to seize your house.
Blacklisted people can qualify for such loans because the risk for the lender is lower given the size of the collateral placed. You may be able to get such a loan from one of the top banks in the country like FNB, Absa, Nedbank and Standard Bank, but you should also consider smaller lenders as they may be more flexible and offer a better deal.
The main benefit of a home equity loan is that it is much cheaper compared to the other types of products available to blacklisted individuals.
This is especially true for the unsecured consumer loans. What's more, you can borrow a much larger amount of money. You can readily use some of the money to repay previous debt or for debt consolidation.
The main drawback of these loans is that you risk losing your home. Unless you are perfectly confident in your ability to repay, things may get from bad to worse. Another drawback of this type of loan is that it involves considerable closing costs and a number of annual and monthly fees.
You can now decide on this one of the loans for blacklisted people.