As we all continue to deal with the consequences of the global credit crunch, it could appear strange to discuss home equity loans for people with bad credit. Mindful that much of the problems faced today have their roots in sub-prime loans, managing the crisis in this way could be the quickest. Most effective way to kick start the recovery – certainly at a local level.Determining home equity is simple: By taking the market value of a property as it is now, and comparing this with the amount owed on the existing mortgage, gives the equity value of the home. Many have been in negative equity over recent months, but as slim shoots of recovery in the housing market appear, home equity loans for people with bad credit could help oil the cogs in the economic machines.With low interest rates, the loans are already attractive. However, before being drawn in by these attractive rates, it is important to understand the risks associated. Now is not the time to gamble on “maybe’s” or “potentials”.Anyone asking the question of “home equity loans for people with bad credit”, needs to be aware of the negatives and positives of agreeing to such a loan. Many of these rely on common sense however – that is something that can be lacking when finances are in discussion.If looking at home equity loans for people with bad credit, you should first talk with your mortgage lender. It is possible they could refinance your current mortgage, to give you some breathing space. You could also discover they will beat any rate you can find elsewhere, though this will vary from institution to institution. If this does not bring any benefits, consider switching to another bank completely. This is a very effective tactic to use if you have been with a bank for a considerable amount of time – particularly if only recently experiencing financial difficulties.If you are struggling financially, is this definitely the best option for you? Do not let pride get in the way of making the tough decisions. Make sure you consider the unpleasant effects of not meeting payments will have. Do not get carried away by an instant solution to complex problem.If the right decision is to go for one of the home equity loans for people with bad credit, ensure you take this moment to ensure you are not in this situation again. Make sure all the necessary bills are paid. Luxuries can wait. What cannot wait however is food on the table, hot water in the taps and gas in the car.