The Dangers of No Credit Check Equity Loans

Beware if you encounter a lender who offers no credit check equity loans.. Anytime a borrower
applies for a line of credit or loan, the lender is under law obligated to check the credit history of the
borrower. Since large sums of money are involved in equity lending, it presents potential risk to both
borrower and lender. The lender may lose if the borrower fails to meet payment obligations and
borrower will lose his/her home if payments are missed.

Thus, when considering equity loans and spotting the “bad credit, no credit check, no problem”
loans, you should precede with caution, since some of the lenders are taking advantage of the less
fortunate. Payday lenders often extend minimal loans to consumers without checking the credit of
the client; however, mortgage lenders are under obligation to check credit. Many of the lenders who
offer bad credit loans often provide debt consolidation leading the clients to believe that they are on
their way out of debt.

Once the borrower steps into the snare, he/she soon learns that debts are increasing instead of
reducing. Furthermore, some of the lenders of home equity loans present a similar trap, luring the
clients in to a web of debt. Once the client agrees to the contract hidden, fees are added to the
monthly installments and the client soon learns he cannot meet his monthly obligations. Therefore,
when considering home equity loans be sure to do a thorough background check on the lender and
company offering the loan. Read the terms and conditions, including any fine print the company has
included on the contract if you want to avoid uncontrollable debt. Remember, your home is at risk,
so procede with extreme caution if you do not want to haphazardly venture in financial ruin.