A home equity loan can provide a lump sum of cash with competitive rates and potential tax deductions. Lenders limit borrowing to 85% of home equity, disbursing funds in a lump sum with fixed interest rates. Credit score, DTI ratio, and CLTV ratio play a role in approval and terms.

Improving credit score and reducing debt levels can increase approval odds for a home equity loan. Lenders typically seek a minimum credit score of 680, but some may approve with a score as low as 620. Understanding and meeting lender requirements is crucial for a successful application process.

If denied a home equity loan, discuss the reasons with the lender to improve future applications. Consider a co-signer with a solid credit rating to boost approval chances. Carefully manage monthly payments to avoid foreclosure risks and weigh the benefits and risks of obtaining a home equity loan based on your financial situation.

Read more at Yahoo Finance: 5 strategies for getting a home equity loan with bad credit