Home Equity Loans: How to Get the Best Rates Available

Without a doubt, what makes any loan affordable or not is the interest rate that is charged. In fact, if a rate is improved to the tune of 3 points, it can mean savings of as much as $1,000 per year on a $50,000 loan. When it comes to home equity loans, getting the percentage points down is a priority.There are a number things that can be done to ensure the best interest rates are secured. The most logical is to improve your credit score, with an improvement of 50 enough to attain those 3 points mentioned above. A poor credit status, on the other hand, could see the borrower paying as much as 5 points above prime, costing as much as $2,000 per annum more than it should.But how can someone alter their credit score to the better? How can they be sure of getting home equity loan approval and still lower their interest rate? Well, here are some suggestions that can help.Check Your Credit ReportReading a credit report is an effective way of discovering the strengths and weaknesses of an application. It provides a chance to examine credit details so that before the application for a home equity loan is submitted, the correct strategy can have been formulated.Meeting loan criteria can be a challenge, and some preparatory moves may be necessary if there is to be any chance of securing the best interest rates. Paying off debts with a consolidation loan can see debts and credit scores increase, but the loan remains for a set number of years. Perhaps, smaller short-term loans might be more effective.  There are three credit agencies that can provide your credit report. A small fee is usually necessary, though worth it. Experian, Equifax or TransUnion may have different scores and have slightly different information but home equity loan approval may depend on the secrets that the report can reveal.What About a Line of Credit?Usually, when an applicant gets a home equity loan, the interest that is charged is the chief worry. For the lifetime of the loan, a set rate will be paid. However, there is a way to reduce the interest charged, provided the total amount of the loan is not spent. A line of credit can be a major advantage in this respect.Choosing between a loan and a line of credit comes down to a few things, not least which offers the best interest rates. For example, if the maximum equity loan available is $75,000, perhaps just $50,000 will actually be borrowed, but the interest will be charged on that amount over the lifetime of the loan.However, while the terms of a home equity loan approval is set in stone, a line of credit relates to a limit value and not a set amount. So, if only $40,000 is actually spent, then interest is only applied to $40,000. In this way, the interest payable is less.Comparing the Best Rates OfferedOf course, searching and comparing different home equity loan packages and their interest rates is an essential part of the process. When your credit rating has improved, the better terms are available. So, go online and search among the online lenders, using the comparison websites to find the best interest rates quickly.However, it is also a good idea to check mortgage lenders too. These lenders are experts in their field, and so can provide an all-round deal that is affordable. It is also good to talk to an advisor about options, so as to get a crystal clear picture. When the good news arrives, and your home equity loan approval is confirmed, it is important to know exactly what is coming around the corner.