Lenders are becoming increasingly picky about the people that qualify for secured loans. If you’ve got bad credit, then you may have suffered a couple of rejections as the rules are becoming even tighter.
But not to worry, just because your credit score is poor doesn’t mean that you can never get your hands on a loan. There are a number of lenders out there that have specialised in serving clients with tainted scores. Here’s a guide to help you out.
What’s a bad credit secured loan?
For starters, this is simply a loan designed for individuals that have a poor score. The amounts to borrow can vary depending on your lender and your property’s value. For really large amounts like £100,000, you may be required to pay over a very long timeframe such as 20 years.
The loan is borrowed but you’ll have to provide your property as security for your home. Typically, the lender takes ‘possession’ of your property which may cause you to lose it if you don’t pay the loan back in time.
Usage of the loan
A good thing about such loans is that they can be used for most things. You could buy assets such as vehicles or caravans, pay for a holiday in Hawaii or even use the money to plan your wedding.
These loans are also suitable to pay off a large number of more expensive debts as you can borrow large amounts for long periods.
Advantages of these loans
Bad credit secured loans have a couple of advantages.
For starters, they’ll help you repair your credit score. This is particularly helpful if you’ve got a bad credit rating, and you wish to get back on track. All you have to do is pay the monthly repayments fully and on a timely basis.
These loans also have a less rigorous eligibility criteria. Applying for one would give you a much higher chance of success as compared to applying for other secured loans.
Due to having your home as security, the loans are also a lot less expensive as compared to other kinds of loans. The reduced risk for the lender further makes the loan even more flexible. They can allow you to have a longer repayment period and borrow more money.
Need any help?
If you’re looking for a loan and have had multiple failed attempts at getting one, then feel free to contact us. We make it our business to offer customers the best loans for the best prices.