Secured Loans With Bad Credit
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Secured Loans with Bad Credit
You might have taken a good look at your requirements and the state of your current borrowing and decided that a secured loan is the best solution to meet your needs. However, finding and being granted the best secured loan can prove to be more difficult than obtaining the best mortgage, as they are generally not as widely available. If you’re trying to do so with a poor credit rating, then the task is even more challenging.
This said, there will be some secured loan companies that will consider your application – it will all depend on your individual circumstances and current situation. Our advisers will give you honest feedback on your chances and options available – get in touch today, and we’ll be able to set up a free initial meeting to point you in the right direction.
Information on Secured Loans with Bad Credit
Can I get a Secured Loan with Bad Credit?
When you have a bad credit history, then it’s likely that you will have been previously declined when applying for a loan, especially if you were dealing with a high street lender. However, the outlook is not all bad – whatever the state of your credit rating, you can still find sources of finance on the market, and some specialist lenders will have products designed just for people like yourself.
What is a Bad Credit Secured Loan?
Bad credit secured loans are specifically designed for borrowers with a bad credit history who need a sizeable amount of finance but have been declined by mainstream lenders. You can expect loans of up to approximately £70,000-75,000 to be agreed, although you could be able to borrow as much at £100,000 if your circumstances fit and you find the right lender. These loans are secured against your property, and will typically be repaid over a 25-30 year period.
If you are a homeowner looking for extra finance, but have not been able to obtain a personal or unsecured loan, and a remortgage isn’t feasible, then a secured loan could suit you perfectly. Specialist bad credit lenders will not turn you down purely on the basis of a poor credit record, but you should bear in mind that a loan of this kind will usually carry higher costs than a mainstream loan, due to the perceived additional risk.
What are Bad Credit Secured Loans suitable for?
If you have a number of expensive debts, then a secured loan can be a useful option to consolidate them into a single, cheaper, more manageable commitment that you can pay off over a period of several years. You are likely to find that the interest rate charged on a bad credit secure loan is lower than that for a guarantor loan, dramatically lower than a payday loan, and could even be cheaper than some credit cards.
This said, bad credit secured loans should not be seen as some kind of magic wand, and you should use them only when you have exhausted other options. Aside from higher rates of interest than general loans, and longer repayment terms that mean the loan will cost you more in the long run, the sum owed will be secured against your house, so your home could be at risk if you fall into financial difficulties again. You need to make sure you have tight control over your finances, thoroughly planning and budgeting accordingly.
What adverse credit is acceptable to obtain a Secured Loan?
Specialist bad credit loan providers will accept applicants with all kinds of bad credit events on their financial history, from just a few blips in the past to more significant issues. When something as insignificant as a missed mobile phone bill payment can cause mainstream lenders to turn you down, bad credit lenders do not seem like an unusual option to people who need extra finance with a poor credit history.
Remember, it’s not just people with adverse credit events on their records that have trouble finding loans. Potential borrowers who are new to using credit, with very little or no credit history, will also struggle with mainstream lenders simply because they do not have enough of a record for a lender to use to judge their borrowing history and make a decision.
So, whether you’ve suffered a CCJ, IVA, a default notice, or even missed payments on a personal loan, credit cards or mortgages, a secured loan agreement could still be possible.
Are Secured Loans the best option for people with Bad Credit?
Much will depend on how much you need to borrow, how long you need to repay the loan, how the comparative interest rates will work out over a period of time, and simply what you are likely to be accepted for. If you are a homeowner and have a bad credit history, then a lender is more likely to approve you for a secured loan than a personal loan, which would have been cheaper.
A secured loan’s flexibility is its main advantage, because:
- You can borrow more than with a personal loan
- The repayment period can be much longer
- The eligibility criteria are more relaxed than a personal loan
But it’s important to realise that lenders can extend this flexibility because the loan is secured against your property, so their level of risk is reduced. As your home could be at risk, you should always be careful to take out a secured loan only on terms that you know you can afford in the long run, even if interest rates were to rise.
How much does a bad credit secured loan cost?
Bad credit secured loans are worked out on an individual basis, according to your personal circumstances and budget, so there is no set template for how much they could cost. It will vary according to the amount you borrow, the length of the repayment period and the severity of your credit history problems.
One tip to keep costs down is to arrange a shorter repayment period, which will mean lower interest charges. But you’ll need to make higher monthly payments in order to achieve this.
Bad Credit Secured Loan Brokers
Working with a team of highly-experienced advisers, who help people every day to secure loans that enable lives to continue, will give you the best chance to find the best result for you, at the best deal available.
As a homeowner, you could get a loan secured against your house to raise cash or credit for a range of purposes. However, if you have black marks on your credit history, the process to getting accepted can be more difficult. We’re here to help to make it much more straightforward with our practical, sympathetic approach that is aimed at getting you the results you need:
- We’ll talk to all potential borrowers, whatever their credit scores
- We conduct soft-footprint credit checks
- Our in-house team includes specialist secured loan brokers
- The Mortgage Centres makes the process as simple as possible
Getting you back on track
Secured loans are designed for people to make the most of their assets in the effort to manage their finances effectively, and it’s our mission to help you with this. We have the knowledge and expertise right here in-house to know where to go to find the most suitable lender for your needs, with loan plans created especially for borrowers in your situation, at the most favourable rates.
How we help
It is not the end of the road if you have been declined for a secured loan by a mainstream lender. When you talk to one of our advisers at The Mortgage Centres, they listen to you, look at your whole situation and take all your circumstances into account before discreetly canvassing a network of specialist lenders to locate the best deal for you. Also, if better alternative options exist that you may not have been previously aware of, we’ll flag them up and help you find the most beneficial solution for your needs.
Bad Credit Secured Loans FAQs
- Can I get a homeowner loan with bad credit?
- Can I get a homeowner loan without a guarantor if I have bad credit?
Yes, it is possible, and we handle loan applications for people with bad credit events on their history on a routine basis, liaising with specialist lenders who are set up to help them. A lot will depend on the severity of their bad credit history. Please note that short-term loans like payday loans – even if repaid on time and in full – may actually do more harm to your credit rating than good.
It very much depends on your individual circumstances, and the credit issues you may have had in the past. It can be difficult to obtain an unsecured loan without a guarantor due to the levels of risk the lender will perceive, and most unsecured loans that take bad credit into account are offered with guarantors. However, this rule might not always be applied when the loan is considered in connection with a secured loan or mortgage, where the rules for guarantors are different.