Bad Credit Loans and Secured Loans
If at some point on the past you have missed payments or defaulted on a loan, credit card or store card, this will have impacted negatively on your credit rating, and it is likely to affect your ability to get approved for a secured loan.
Your credit rating is one of the main criteria used by banks and other lenders when ascertaining whether you are a good prospect for credit. If you have missed payments in the past, have been issues with a CCJ or have been declared bankrupt, these events will be highlighted on your credit file.
Getting a Loan with Credit Issues
When you make an application for a new loan, most lenders will conduct a thorough search of your credit file. It is highly likely that you will have to pay a higher rate of interest on your loan than someone who has a decent credit history.
If you do have a bad credit rating, then you may find that you have to shop around for a lender that is prepared to lend the amount of money you require. This is because you will be regarded as ‘high risk’, and lenders may be concerned that you will default on the loan. Some more specialist lenders may be willing to lend to you, but at a less competitive rate of interest. Finding the right loan provider is vital to having an affordable loan with reasonable terms and conditions. Click Finance offers loans for bad credit.
If your credit history is poor, then one way to proceed will be to secure the loan against your home. This will provide the lender with the extra security that they require in order to feel confident in lending to you. By opting for a secured product, you should receive a decent rate of interest, meaning that you will pay back less over the course of the loan. However, it is crucial that you bear in mind that if you go on to default your home will be at risk of repossession. The loan provider will have the right to repossess your property if you fail to pay back what you owe – both the loan itself and the interest on it.
If you are struggling with a number of debts and are finding it tricky to meet all the repayments, then you may find it helpful to look at bad credit loans or debt consolidation loans. These types of loan are designed to make your total debt easier to manage. It may also help to save you money if you can secure a better rate of interest to that that which you are currently paying. The new consolidation amalgamates all your current debt into one easier-to-manage loan and can be paid off over a longer period of time, thus relieving any immediate financial pressure.
Taking out a secured loan of this type and repaying it responsibly can help to rebuild your damaged credit score. By demonstrating that you are committed to repaying the loan in full and on time, you will show that that you can be trusted with credit, and you are more likely to be offered a better rate of interest on any future loans you apply for.
Low credit score got you down? Click here for tips for raising your credit score.