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Have been declared bankrupt or had county court judgements lodged against you? Have you ever thought that you couldn’t obtain a secured loan due to your previous credit history? If you fit these categories, then it is assumed that you have previous “Bad Credit” and you will not be able to apply for a “Secured Loan” However, today there are many specialised companies offering “Bad Credit Secured Loans”. All these companies ask is that you are a homeowner and aged 18 years or above.
Bad Credit Secured Loans are loans issued by a bank or specialised financial company, which are secured against your property usually in the form of a Mortgage.
A Bad Credit Secured Loan can be used to fund a variety of things but the main thing it can be used for is to consolidate those hefty debts that you may have outstanding. This means that instead of having a large number of monthly repayments to make, you will only have one repayment to make to your loan company. They can also be used to pay for a new car or even home improvements.
Applicants with a low credit rating often have county court judgements against them where they have failed to pay previous debt or have some type of payment arrears. It’s these types of people that Bad Credit Secured Loans are targeted to. Just because you have a bad credit rating doesn’t necessarily mean that you will be turned down for a Secured Loan as it’s a specialised product that is available to people with a poor credit rating.
When applying for a Bad Credit Secured Loan, it’s best to check first with a specialised loan company through the internet. It’s here that you will find a great deal of information from a number of companies who are willing to lend to people with a poor credit history. If the amount of information available is too much for you to digest, then it may be worth talking to your existing bank, however, most specialised loan companies will be able to offer a more in-depth service as they are specialists in this area. It is best for you to compare which companies can offer you the best deal as it could mean that you are able to get a lower interest rate. Whichever company you choose to apply to for the Secured Loan, your credit history will always be checked using the relevant companies’ credit scoring system.
In order for the application to proceed, your personal details will be checked along with the value of your property. This will enable the loan company to assess the value of your home; they will then be able to calculate how much equity you have in your home. Therefore, you can apply to borrow the equity of your property.
You can borrow from as little as £500.00 to in excess of £150,000.00 depending on your circumstances. The amount you are able to borrow will depend on you current financial situation, the bank will look at how much your current debts are, your monthly expenditure and your monthly income.
Interest rates on a Bad Credit Secured Loan are quoted as an “APR” which means Annual Percentage Rate. The bank will set an APR depending on the amount of Secured Loan you have applied for and how long the repayment period has been set for. Repayment terms can be from 5 years to 25 years and in some cases 30 years.
At the time of application for a Bad Credit Secured Loan, a “typical APR rate” will be noted as a guide to what APR you can expect to be charged. However, once the loan has been approved and accepted, will you then be notified of the actual APR that will be used for the loan.
Points worth considering when applying for a Bad Credit Secured Loan are that you may be charged higher interest rates due to the risk being higher for the bank to borrow to someone with a poor credit history. You also have to remember that if you fail to make monthly repayments it’s almost certain that your home will be re-possessed in order for the loan company to recoup their money.
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