Need a home equity loan? Be careful.

Elderly consumers, in particular, are often targets of some subprime home equity lenders, because they often have substantial equity in their homes, yet have reduced incomes. In many cases, those living in lower-income and minority neighborhoods -- where traditional banking services continue to be in short supply -- tend to turn to subprime lenders when, in fact, they may be eligible for loans with better terms.

Things to watch out for:

Equity Stripping: The lender gives you a loan, based on the equity in your home, not on your ability to repay based on your income. If you can't make the payments, you could end up losing your home.

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Loan Flipping: The lender encourages you to repeatedly refinance the loan and often, to borrow more money. Each time you refinance, you pay additional fees and interest points. That only serves to increase your debt.

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Credit Insurance Packing: The lender adds credit insurance to your loan, which you may not need.

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Bait and Switch: The lender offers one set of loan terms when you apply, then pressures you to accept higher charges when you sign to complete the transaction.

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Deceptive Loan Servicing: The lender doesn't provide you with accurate or complete account statements and payoff figures. That makes it almost impossible for you to determine how much you have paid or how much you owe. You may pay more than you owe.

The best way to avoid problems in getting a home equity loan is to compare different web sites to find the best plan for you. Also, your local banks are a good source of home equity loans.