Bad Credit Secured Loans

Having bad credit to your name can present a barrier to many kinds of financial products and lines of credit available through traditional routes and mainstream providers on the high street. In the current climate, where financial institutions are subject to tighter rules about lending, they are obliged to undertake thorough checks on potential borrowers and in general the culture is more risk-averse than it once was. Getting a secured loan with a poor credit record can be very much an uphill struggle. If you have an adverse credit history, it’s likely that you’ll have been refused a loan in the past.

However, you don’t need to worry, because even with a poor credit score or adverse credit events on your record, there are still potential sources of finance for you out there. Instead of wasting more time searching for a lender who will be willing to grant you a loan, by using an expert professional broker you will be able to access a selection of specialist lenders who don’t usually deal directly with the public, some of which offer loan schemes that have been designed specifically for prospective borrowers like you.

Where personal or unsecured loans are generally for smaller amounts, perhaps used for a major one-off purchase or project, and are designed to be paid back over a shorter period of time, secured loans are generally agreed for large amounts and are repaid over a longer period (sometimes as long as a mortgage, perhaps 25 years). This can make them suitable for people who have a number of more expensive debts and who want to consolidate them into one manageable, more cost-efficient loan with far simpler repayments.

The reason for this is that interest rates charged on bad credit secured loans are typically lower than those you find applied to guarantor loans, and significantly lower than payday loans, which are known to be incredibly expensive and liable to lead to spiralling costs if not paid back promptly. Secured loans, even with bad credit, can also be cheaper than some credit cards.

However, a bad credit secured loan should be treated with caution and seen as a last resort for many. Not only will your poor credit score lead to you being charged a higher rate of interest, but as it will be secured against your property, your home is potentially also at risk should you not be able to keep up with the repayments.

As the repayment terms are also longer than alternative sources of finance, such as unsecured loans, interest will continue to accrue over time and the loan is likely to cost you more in the long run, even if the repayment amounts are initially smaller than would have been expected for other types of credit.

Before you commit to a bad credit secured loan, be sure to discuss your situation and your plans with a professional financial advisor or a broker with a deep understanding of this type of finance. They could be likely to highlight some aspects of secured loans that you may not have anticipated, or even suggest an alternative path that you hadn’t known was open to you.

As secured loans are not so widely available, the criteria for obtaining one can be slightly more taxing than that for unsecured credit, and having adverse credit items on your record can make the process all the more challenging. This said, obtaining a secured loan with adverse credit is by no means impossible.

With a number of lenders on the market offering products designed to be suitable for those with poor credit, you can be accepted for a bad credit secured loan whether you’ve had just a few blips on your financial history, or a credit report that highlights some more significant issues. What exact issues are acceptable to individual lenders will vary from one to the other – each will have their own policies when it comes to what they will accept, with some perhaps even specialising in lending to people who have experienced a particular adverse credit problem, such as bankruptcy, in the past.

However, it is not just those with a bad credit score that can struggle to find a lender willing to help them with a secured loan. Those with a non-existent credit score, who might have very rarely taken out any borrowing in the past, if at all, can also experience problems when applying for many types of credit. In the absence of any record or pattern of borrowing, lenders are unable to tell what the applicant’s approach to credit will be, and if they are a high risk or not. Without enough information to make a decision, the lender will often turn the applicant down.

When something as minor as missing a mobile phone payment or being late with your utility bills can damage your credit score enough for the mainstream lenders to think twice about lending to you, then your best option for obtaining a secured loan with bad credit will be one of the many niche-market lenders available through professional brokers. Most bad credit events will be accepted by specialist bad credit loan providers, including missing repayments on credit cards, personal loans and mortgages.

It is usually a matter of knowing exactly which one to approach, and framing your application to make a decision as straightforward as possible. To find out more about how we can help you with this, please do get in touch with our expert team today to arrange a free, no-obligation initial consultation.

This really depends on the amount of money you need and the period of time you’d like to repay the loan. As a homeowner with a history of bad credit, you are more likely to be accepted for a secured loan rather than a personal loan, which would be the cheaper option.

One of the benefits of a secured loan is its flexibility:

1. The repayment term can be longer
2. You can borrow more than a personal loan
3. The eligibility criteria is less rigorous than a personal loan

However, the reason for this flexibility is due to the fact that your property is being used as security against the loan, so the level of risk for the lender is reduced. You should always remember that losing your home is a real possibility, so only take out a loan you could comfortably afford to repay, even if interest rates were to rise.

Secured loans allow homeowners to use equity from the properties for a variety of purposes. However, sometimes having a bad credit history can make this process a bit more complicated. Using our team of professional secured loan brokers can make the procedure a lot more straightforward.

1. We consider all clients with bad credit scores
2. Soft footprint credit checks
3. We have an in-house team of secured loan brokers
4. Just Mortgage Brokers can make the procedure a lot more straightforward