What is a bad credit secured loan?
Bad credit secured loans are loans designed for people with poor credit histories who have been turned down by the mainstream lenders. If you own your own home, then loans can be agreed for large amounts of up to £70,000-£75,000, although you could borrow as much £100,000 with the right lender, if you have sufficient security or equity in your property. The loans are repaid over longer periods, typically 25-30 years, and are secured against your property, meaning that you may have to use the equity in your home to repay the loan if you are unable to meet the instalment plan.
Bad credit secured loans are well suited to homeowners who have not been able to arrange a personal or unsecured loan, and a remortgage simply doesn’t make sense when you take the interest rate and possible arrangement fees into consideration. Bad credit lenders do not refuse loan applicants purely on the basis of a poor credit history – they will also look at your current circumstances, how your approach to credit has changed since the infringement occurred and also the level of equity and assets you have available to secure the loan against.
However, this type of credit will typically be more expensive than a conventional homeowner’s loan to reflect the extra perceived risk involved with lending to someone with bad credit. You should also remember that a second charge on your property can be a serious commitment – one that your mortgage provider may need to be made aware of – and a lender will want to know your reasons for taking out the loan, what you will be using the money for and how you plan to pay it back, as well as the usual factors such as your income and household budget.