These types of loans are commonly called home equity loans, and are aimed at a class of people, just like every other of loan is designed for a particular market or group of people. In this case these people have some equity in their property, that is the debt they owe against the property is less than the value.
If you are in this fortunate position you will find that lenders are much more likely to offer you a loan as they have some form of security that they will be able to get their money back even if you default on the payments. Now obviously the best deals are going to go to those who have the best credit reports but even if your report is far from ideal there is still a good chance that you will be able to find a company willing to lend you the money you need.
If you do have a particularly bad credit report then you will be better off going to one of the more specialist companies. These do not look at your credit record but put more emphasis on whether you can afford to make the repayments. However you will find that the interest rate you pay will be considerably higher than if you had good credit and were able to borrow from your bank.
These types of loans come in two flavours one is where you have to use the money on improving the home and the other can be used for whatever purpose you decide. The former is generally called a home improvement loan and the latter a personal loan.
These loans are generally for larger amounts of money and for quite long periods of time i.e. 10 to 15 years., they are pretty easy to apply for, and in general can be quite flexible. The downside is that your home is in the temporary control of the lender (and if you are still paying a mortgage both lenders) and if you default on the payments you are in danger of losing your home.
One other benefit of taking out a bad credit loan secured against the equity in your property, is that, as long as you continue to make the repayments in a timely manner then your credit report also starts to improve, which makes future credit easier to get. However DO NOT take out one of these loans just to improve your credit report as it will cost you a lot of money that you do not need to spend.