Using the credit you've got to get more

To a lender, the most attractive borrower is someone with assets under the lender's control. If you have proven financial responsibility, you're even more attractive. With these two advantages, you can often get a loan more quickly and at better terms by leveraging the power of your assets.

Your home
One of the most common and most tempting resources for a loan is your home's equity (the difference between what you owe and what the home is worth). Many lenders look for at least a 30% difference. In exchange for the loan, you'll give the lender a secondary interest in your home. (Your original mortgage lender has first interest.) If you fail to make your home equity loan payments, the lender can force the sale of the home but won't receive any proceeds until the lender of the first mortgage is paid in full.

There are two kinds of home equity loans; A "second mortgage" is a lump sum that you repay in scheduled installments. There's also a "home equity line of credit" where you can borrow any amount up to the limit, at any time, for any reason. You then repay it the same way you repay your credit cards.

Your securities
Brokerage firms lend money "on margin." The most they’ll lend is a percentage of the total value of the “marginable” securities in your account (the ones the broker considers valuable enough to protect the firm if you default). The broker gives you the loan and you give the broker the right to sell the securities in your account if you fail to repay. You pay interest on the loan arid repay it as you would any other.

The attraction of margin loans is the interest rate: It is usually a few points less than you'd pay at a hank. Margin loans can he risky, however. If the prices of your marginable securities drop to a point where their value doesn't leave enough protection, the broker will make a margin call" (ask you to put in more money or pledge more securities). Failure to meet a margin call means instant sale of the securities you've already pledged—often at a loss.

Your life insurance
If you have a whole life policy (not term insurance), you maybe able to borrow an amount equal to its "cash surrender value." This is exactly what it says: the amount of cash you'll receive if you decide to stop paying premiums and surrender the policy. The longer you own the policy (and the more premiums you pay), the more the (and surrender value increases.

The interest charged on such a loan varies from company to company. Often, though, it's lower than a bank loan. An insurance company also isn't as concerned about being repaid so long as you make the interest payments on schedule. If you die before the loan is repaid, they'll simply deduct what's owed to them and then pay out the remaining value of the policy.

Note:
Borrowing from 401(k)s. You can also borrow from your 401(k) retirement plan. Different plans have different restrictions, and you'll be required to make regular repayments with interest. So, not only will you borrow from yourself, you'll also be paying interest to yourself.