Individuals who are looking forward at investing on secondary property or home renovations or even for their child’s education, home equity installment loans ought to fit their cause. It is ideal for individuals who need to make a large investment by using the amount that has already been invested on a house or a secondary property. Under such circumstances one does not need to refinance his or her mortgage.
What do you mean by a home equity installment loan?
Home equity installment loans are perhaps the means by which an individual can borrow money against the value of his or her home. In other words, it makes use of the equity an individual already possesses in his or her home as collateral. It allows you to take large loans at interest rates that are lower than most other loans.
These home equity loans are standard, i.e. they are approved for a certain amount once. A fixed span of time (3 to 30 years) is scheduled by which the loan must beclear. This is quite similar to that of Installment Loans Online Alternative to Payday Loans but the interest rates are somewhat lower. Like all other installment loans the net amount payable includes the principal amount as well as the interest.
The maximum amount that can be lend is calculated in accordance with the Loan-to-value ratio. This ratio can be as high as eighty to ninety percent.
Home equity installment loans may be used to fund anything and everything staring from house renovations all the way to wedding. Listed below are some of the main reasons as to why individuals apply for home equity loans:
• Funding a house renovation.
• Paying college fees. P
• For paying off any sort of higher-interest debts.
• For purchasing a rental property.
• For Investing in some sort of business.
Pros and cons
Well when it comes to a home equity installment loan, it has several advantages that give it an edge over the other forms of loans. It is a good option considering large lump payment, however it’s not recommended for small purchases where it’s not that difficult to pay back. This is because when you apply for such a loan, you might as well end up losing your home if the amount is not cleared as per the terms and conditions that were agreed upon at the time the loan was passed.
Installment loans are perhaps the best available option in the event that an individual needs to make huge lump payment immediately.