Bad credit secured loan
It would have to be said that in the current economy many people are searching for a Bad Credit Secured Loan. Whilst a loan of this nature might not have been in such demand during the boom years of the nineties, a bad credit secured loan is now the only means by which many individuals are able to obtain borrowing.
Whilst the reasons for having to get a loan of this type is not really good news as it means that borrowers are struggling, it could be regarded as good news in that there are a more varied range of products on the market with some of the more well known and trusted lenders becoming involved due to the sheer demand for a bad credit secured loan.
The way that a bad credit secured loan works is that it is secured in the borrowers home. There has to be sufficient equity in the home for a loan of this type to be suitable but even in the current financial climate, someone who purchased their home more than 5 years ago will usually find that they have sufficient equity in their property.
It should be noted that a secured bad credit loan is separate from the mortgage on a home and it is quite possible for it to be arranged over different terms which are dependant on the borrowers different requirements.
Even though a bad credit secured loan can be accessed by borrowers with a not so good credit rating, as the name would suggest, the borrowers credit file will still be taken into account such as the amount of any existing debt as well. There is no secret that anyone with a bad credit rating poses more risk to the lender but that after all is what a bad credit secured loan is all about.
A bad credit secured loan comes with a higher interest rate as you would expect and there are also other factors which will determine what kind of a deal you will be able to get. One of these factors is the loan to value which equates to the available equity in the property that the loan is being secured against. The higher the equity usually means the better the deal but this will become clearer during the application process.
The usual length of time that a bad credit secured loan will be taken out for is usually between 5 and 25 years but there is no real set time so it is quite possible to arrange a loan of this type over a shorter period if required, depending on the borrowers financial circumstances.
Finally is is important that anyone who is looking for a bad credit secure loan takes the time to research the different loan that are available. It is a big mistake to go for the first one that you see because this is a highly competitive market it is quite possible to get an even more attractive rate, even if it is a bad credit secured loan.