Personal loan calculator beneficial as home equity loans make comebac

Home equity loans (Helocs) are making a comeback according to the economics research unit of Moody's Corp. Specifically, there will be a 30 percent increase to $79.6 billion in 2012, the highest level since the start of the financial crisis in 2008. Helocs are a type of loan where the borrower uses the equity in his or her home as collateral.

Bloomberg reported that a combination of record-low mortgage rates and an improving job market make it easier for people to borrow. With these factors, lenders should ensure they have quality personal loan software in place.

The article went on to say that the increase in Helocs will benefit the nation's economy as a whole. A rise in home equity lines will fuel the purchase of goods like refrigerators and televisions. Consumer spending is the biggest part of the economy and rose to a 2 percent annual rate last quarter from a 1.5 percent pace in the prior period.

Anika Khan, an economist in Charlotte, North Carolina, at Wells Fargo Securities LLC, told Bloomberg that home-equity lenders and borrowers will be more discerning this time.

"The memory of the housing boom and the correction will make folks a lot more conservative," Khan told the source. "That means only getting the amount of loan they absolutely need, and spending it in a more sensible way."

Along with the improvement in home equity loans, the economy could be taking another positive step forward with single-family serious delinquency rates. Fannie Mae's recent monthly summary said that the rate fell six basis points to 3.35 percent in October, compared to 3.41 percent in September and 4 percent from the previous year.

With signs of improvement like this, lenders would benefit from using an amortization schedule for loans paired with mortgage loan software, ensuring that borrowers can handle their payment plans.