How to Get a Personal Loan to Prevent Foreclosure

If you are behind on your monthly mortgage payments, your lender might be threatening foreclosure. When the lender forecloses on your house you have to move out. The lender sells your house to recover the money for the mortgage, and you are still responsible for any remaining balance on the loan.

Instructions

Difficulty: Moderate

1. Find out exactly how far you are behind on your mortgage and how much money your owe. If you do not have this figure in your records, call your lender's office and ask.
2. Talk to the lender and let him know that you are working to prevent foreclosure. Tell him you are securing a personal loan to pay off the money that you owe him and ask him to give you enough time to do so before continuing with the legal proceedings for foreclosure.
3. Check your credit score by contacting the credit reporting agencies. The three big agencies are TransUnion, Experian and Equifax. You are entitled to get a report from each of these companies once a year, free of charge. Your credit score needs to be 600 or above to qualify for a personal loan.
4. Decide if you want to get a secured or unsecured personal loan. A secured personal loan is guaranteed by collateral. If you have enough equity built in your home you can use that as your collateral. Other property and vehicles that are paid in full are also considered collateral as long as they have value. Secured personal loans come with a lower interest rate than do unsecured.
5. Solicit rate quotes from a few lenders to make sure you get the best rates available to you. Be sure to do a Better Business Bureau (BBB) checks on any lender you are considering borrowing from to make sure they are reputable.
6. Apply for a personal loan after doing all of your homework.
7. Use the money from the personal loan to pay your mortgage lender and stop the foreclosure.

Tips & Warnings

• Remember that if you take out a personal loan to pay money owed on your mortgage, you then have to pay off the personal loan, in addition to your mortgage payments. Personal mortgage loans to stop foreclosure are best used by people who are having temporary, short term, financial problems and expect a change in their finances quickly.