Taking out a secured loan can be the key to getting your monthly costs down. Secured loans for bad credit could still help your family. Returned direct debits for smaller credit agreements like unsecured personal loans, logbook loans, credit cards and store cards at a high interest rate can make people’s lives a misery. You can get constant harassment from lenders chasing you.
Have you got your phone ringing while you are at work that’s your credit card chasing you? You must keep up repayments on all your agreements for your credit ratings to improve.
Even monthly payments on your utility bills and the conduct of your bank account can be lodged with credit reference agencies that many lenders and personal finance companies can see and use to assess your personal circumstances, and potentially exclude you from lower interest rates. A higher interest rate will significantly increase the total amount payable on your less than perfect credit loan.
Even if your credit report shows stressed circumstances and you have read all the warnings saying think carefully before securing debts on your home as your home may be repossessed, your credit scores may allow you to get a repayment loan on your property to improve your credit.
If you can show income for a loan amount so you can pay off all your other debts your finances should improve. Securing debts against your home allows homeowners to access lower APRC rates and have loan applications for amounts and a loan term with a longer period.
To get a good secured loan deal starting with a soft search you could be better off with a broker not a lender initially. If you want to borrow money, simultaneously improving your credit score you have to make an application that is likely to be accepted first time often within 24 hours.
What about Guarantor Loans – can they make up for my financial circumstances?
These are unsecured loans with often very high rates of interest when the guarantor that’s likely a homeowner with good credit could simply borrow the money for you or loan you the money from their savings as they are on the hook for your high monthly repayments anyway. When you apply for a loan they often want the debt secured by a family member.
How important is my property value and how much equity do I have?
The value of your home or main residence is very important when applying for a secured personal loan. But one of the most important things are repayments on a mortgage you already have. People with poor credit can get a representative example before securing other debts with a second charge. You pay back a fixed per month payment and the loan principal goes down each month.
Even though some loans for people with adverse credit don’t have rates as good as high street lenders when you get a loan the overall cost could be much lower than your existing credit commitments. There are some lower rates available for people with good afordability. The best options can be found sometimes not on the comparison sites.
Secured Loans For Bad Credit comparison service – is the rate of interest affordable?
Government bond yields are still very low and lenders are looking for yield. The strength of the UK residential property market is a very attractive assist to lend against. Lenders still compete for business in the sub prime market as the quality of the collateral is excellent.
What about secured loans for bad credit direct lenders only?
There is a big demand for direct lenders and many people prefer only one point of contact.
Qualified loan advisors will have a good feel for loan providers’ appetite for lending to consolidate existing debts. The representative apr for 2nd charge mortgages may change a little but they will never be near high street lenders. There is a massive demand for a secured loan bad credit direct lender as people don’t want to pay brokers fees.
Lending decisions may change a little depending on the type of loan and equity in your home, but the main principle of being able to afford the repayments still holds true and previously missed payments are still considered.
What about my outstanding mortgage and the amount of money I already owe?
When consolidating debt into other loan products at a fixed rate, you will offer security to the lender – usually your house. You will need to repay the loan in addition to your existing mortgage. The loan you will get will vary depending on other factors and the more adverse credit you have the higher rates will apply.
What about affordability checks?
You may find you get asked a lot of silly questions about your lifestyle, but these questions are very relevant when you want a lower interest rate. If you gamble, have regular trips to the hairdresser, have a history of expensive holidays, even if you make repayments on your mortgage, you have to be able to afford the monthly loan payments on your new loan subject to status.
What happens to the credit score when people get bad credit secured loans?
People that work out consolidating existing borrowing is a good idea can often find they end up with a higher credit score as secured loans tend to de-clutter a person’s life as existing borrowing is all tidied up as the bad credit rating caused by other unsecured lenders starts to go away over time.
When the lender looks at the secured loan application they will understand the impact of the unsecured credit and other debt and how your financial situation will likely improve.
What are the specialist lenders that deal with people with less than perfect credit history?
People are always looking for the best secured loan, but depending on your financial history, your secured loan broker will be looking for the best lender that will accept your current circumstances as they know prime lenders will not touch people with poor credit histories.
Even with some missed repayments, lenders still compete for business from people with poor credit history and the overall representative example has to have a competitive interest rate, but they have to be sure you can keep up with repayments and comfortably meet other commitments, so your total repayments are very important.
How many people let unsecured debt pile up again after the completion of the bad credit secured loans offer?
The whole point of using secured financial products to restructure debt is to save money and improve your financial future.
Getting more credit from other lenders after the serious commitment of a higher loan on your home could be very unwise. If you have an appointed representative or credit broker they will tell you this is the main risk.
If you go back to a considerable amount of higher rate debt you may need to sell other assets that you don’t want to sell.
Will a county court judgement exclude me from a financial product like a bad credit secured loan?
Probably not no. A secured loan with bad credit is all to do with your ability to make monthly repayments, in short – affordability.
Why do I need to get a loan secured on my own home – why not just get an unsecured loan?
- There is less risk to the lender
- The maximum apr will be lower
- Large amounts are achievable
- Longer terms are common
- Other types of loans are not available
- A second charge loan should be a last resort but could represent the best deal
- These loans are designed specifically to get the most that is possible to get
- Some lenders offer an instant decision in principal
- A joint application can help you get approved
- You could save more money in the long run for many reasons
- The initial fact find is a free service including looking into original debt and electoral roll records
- The important information is if you work hard the loan could steadily build your credit score
- Some rates are 5.5% fixed for life with no early redemption charge
- If you lie on your application it may make a mark on your credit file
Are the loan terms usually longer than 5 years?
In a word, yes, because it’s likely a larger amount you need to borrow and a longer period of time is a better option for lower payments to pay it back.
Why are so many people looking for secured loans for bad credit instant decision?
People are impatient and want an immediate commitment to the loan. However, it’s only a decision in principle that can be obtained quickly. There is a massive demand for urgent loans for bad credit too in the UK because of the cost of living crisis.
Other key facts to consider:
- The longer the term the more interest you will pay and the total cost will rise
- The rates displayed on the website will not be available to everyone, they will vary depending on your ability to pay off the loan
- Unsecured loans for bad credit for larger amounts are not available
- You should be cautious if you are thinking of consolidating existing debt on your home as your circumstances may change
- depending on your personal circumstances you can put your home at risk when you secure the loan and don’t make repayments on time
- People with bad credit may have individual requirements that could involve increasing the total amount owed
Is an independent credit broker the best person to ask about a bad credit homeowner loan?
As lenders for secured homeowner loans are often offered via secured loan brokers only, the only way to get an overall cost for comparison for a larger sum loan could be via a broker who can provide financial advice about the one monthly repayment.
The key thing is you can afford the monthly repayments and your individual circumstances will be key to the total amount you repay and the maximum aprc you are warned of.