Home Equity Line of Credit | What If I Have Bad Credit?

Home Equity Line of Credit

There are times in life when you find that you need to borrow money. Sometimes it can be an emergency or other times it could be for an investment opportunity. Whatever the reason, using a home equity line of credit can be an incredibly useful source of credit for homeowners. Feel free to explore Nifty for cash loans as well.

What is a home equity line of credit?

A home equity line of credit is a loan that lenders make available to the borrower using the equity in their house. The borrow can usually borrow this loan in the form of an account off their home loan. They can usually use it at their own discretion.

A home equity line of credit works much the same as a credit card, however with a much better interest rate. You can withdraw money as you need it without incurring cash withdrawal fees. How much you can borrow depends on the amount of equity you have available in your property.

What is home equity?

Equity is the difference between the amount you owe on your home and how much it is worth. When applying for a home equity line of credit the bank requires you to get a valuation of your property. This is so the lender can confirm the current market worth/value of your home. It will help to determine how much equity you have in your home and how much the bank is willing to lend you.

How much can you borrow with a home equity line of credit?

Unfortunately, lenders will not lend you 100% of your equity. This is due to the fact that if for some reason you are unable to meet your repayments, there is a buffer amount to give you room to repay the loan. If needed the lender can also sell your property to regain their costs and outlays. The lender usually set a cap at around 80% for a home equity line of credit.

What are the pros and cons of using a home equity line of credit?

There are both pros and cons of using your home equity as a source of credit. It’s always good to know both sides before you make the decision to borrow. Here’s a list of reasons for and against the prospect of using a home equity line of credit.


  • You are seen as a less risky borrower, as you are using your property as security for the loan.
  • This also means that you are likely to be offered a lower interest rate. This is because lenders will see you as a less risky investment.


  • The downside of using a home equity line of credit is that if your finances go downhill or if your investment fails, you could risk losing your house. However, this is the worst-case scenario.

Why do people get a home equity line of credit?

There are several reasons why people may want to use a home equity line of credit. Though below is a list of some of the most common reasons people may choose to take out a home equity line of credit:

  • Minor renovations
  • Debt consolidation
  • Investing in shares
  • Using as a deposit on another property

What if I have had bad credit loans previously?

If you have a bad credit history you may need to shop around or use a broker to help you refinance the right way. They may improve your chances of success by offering the bank all the information they need and ensure your application looks well put together.

Applying to multiple lenders and being rejected can actually damage your credit history. This can ultimately affect your chances of getting the loan you want! Other lenders will question why the last lender didn’t approve your loan. In addition, the loan enquiries and rejections will be listed on your credit report.

Another point to consider is that the kind of lenders that you have used previously can hurt your credit rating. This is because some lenders are seen as higher risk lenders than some of the more popular lenders.

Should I use a broker to help me get a home equity line of credit?

If you use a broker they can look into your credit history and identify any potential problems. Therefore they can help you fix these problems before you apply for your next loan.

You can also enlist the help of a credit repair company. However, they do charge a fee. So, it’s worth getting a written quote from them before you agree to allow them to do anything on your behalf. They help identify why you are being knocked back for loans or why you have a bad credit rating.

If the brokers can identify any entries that are false or not yours, they can help delete those entries from your credit report. This will help clear up your credit woes!

Brokers may also be able to help you negotiate with the debtors that made the entry to enter into a payment agreement or have the entries removed.

Can I get a home equity line of credit from Nifty? 

At Nifty, we do not provide home equity lines of credit. We do, however, provide personal loans between $300 and $10,000 that can be used to cover a variety of different costs. Check out some of the loans we’ve already approved:

Home improvement loans 

Don’t put off that renovation any longer. With Nifty, you could get the renovation finance you need without the hassle.

Don’t have time to stand in line at the bank and wait weeks for approval? No worries! If you apply with Nifty during AEST business hours you could have an outcome on your home improvement loan application in 60 minutes. Our team is driven to make it easier for Aussies to get fast, reliable and safe cash. 

Holiday loans

Heading away for the weekend? Or, maybe you’ve been dreaming of that big European vacation? Wherever you’re headed, Nifty has the cash to get you there. If you want to make your next holiday unforgettable just submit an application with Nifty today. You could have the cash in your account and ready to use in just 60 seconds once approved*. So, what are you waiting for?

*NPP & Osko enabled bank accounts. 

Unexpected bill loans 

If an unexpected bill has popped up at the most inopportune time, don’t stress! That’s where we come in. Nifty could have the cash you need to save the day. You could apply for between $300 and $10,000 in just a few short minutes. The best part is if your bank is NPP or Osko enabled you could have the cash in your account and ready to use in just 60 seconds. You can find out whether your individual bank supports instant transfers. Don’t go it alone, ask Nifty for a helping hand.

Final words

Therefore, it is not impossible to get an equity cash advance with bad credit. However, you need to be smart about how you go about it and get some help before you start applying for loans.
Contact a broker and ensure you have all of your bad credit histories under control. Then, make a plan of action to prove to the lender that they can have confidence in you as a borrower in the future!

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Andy Andy


Andrew Bell

Since founding Nifty in 2016, Bell has continued to make waves within the local financial sector for his continued ambition and willingness to adopt emerging technologies.

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