Popular Home Equity Lenders

There is considerable discussion in the news lately about the high level of consumer debt, but quite often consumers can improve their debt situation by obtaining a home equity line of credit. If this is the chosen route, carefully evaluate the lenders available since options between lenders can vary widely.

Banks

For most people, the first thought is to approach their regular banker. This makes good sense since the borrower is already familiar with the bank and feels comfortable dealing there. Quite likely the bank is already the lender for other items such as vehicles, recreational vehicles or student loans. The bank is also familiar with the borrower's financial situation and presumably is interested in engaging in home mortgages. Home equity loans are a good deal for lenders when done correctly since the loan security is stable and the value depreciates less than other assets. Quite possibly this is where the borrower receives the best rate offer.

Credit unions

The next option people should consider is the local credit union. Credit unions offer the same services as banks, and have less of the negative aspects which are often disliked. Credit unions are member-owned; this means that profits do not go to the shareholders, but instead go to the owners in the form of patronage. Usually, the more services of the credit union you use, the larger your patronage payment. People also enjoy the democratic aspect of credit unions. Each member has a vote in electing a board of directors. A member cannot have more than one vote. This is in contrast to banks where a person may own many, many shares, and each share is entitled to a vote. This, in fact, is how banks are controlled by a very few wealthy people. For those upset with large bank bonuses to senior management, the credit union is the way to go. You can feel good about where your money is going and get the same products you would get at a bank. Your money is just as secure, and the rate offered is likely identical.

However you decide to proceed, either choice is an improvement over paying the high interest rates of consumer loans and credit cards. If you have equity in your home, it is a good idea to make use of it in order to save some money.