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Mortgages
What is a home equity loan?
The first thing to be clear about is that a secured loan is not the same as a home equity loan. In the first case, the loan amount is used to buy a property, while in the case of a home equity loan the amount loaned doesn't necessarily have to be used to buy a property.
A home equity loan is a loan in which you provide a property you own as the guarantee of payment. This means that the bank could execute its rights on that property if you don't fulfil your payment obligations on the loan.
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Who can apply for a home equity loan?
In general, home equity loans, i.e when you use your home as the guarantee for a personal loan, are designed for people who need to borrow a large amount of money and can't obtain any other type of financing. It is not usually necessary to explain why you need the sum of money in question.
This credit system is commonly used by people who are experiencing financial difficulties and have equity on their home that they can put down as a guarantee until their financial situation improves. This type of credit is also available to people listed in delinquent files, regardless of the value of the debt or the bank.
A home equity loan is therefore a valid solution for people who need financing to regroup their debts, start a business, release a seizure or for anything else that requires short-term financial solvency.