What is a secured loan for bad credit?
It is a type of loan for people with bad credit, where you use your property as security (collateral). This means if you miss payments, the lender could take your property to recover the money you borrowed.
Using your home as security reduces the lender’s risk, which might make it easier to get approved even with a poor credit history. However, with a less favourable credit profile, you might have fewer options and higher interest rates.
Secured loans are also available for those with good or average credit profiles, offering flexibility in different situations.
What is bad credit?
Bad credit can arise from various situations, such as:
- Missing payments on loans or other credit accounts
- Having accounts in default
- Receiving a County Court Judgment (CCJ)
- Being in an Individual Voluntary Arrangement (IVA)
- Filing for bankrupcty
Many factors can lead to bad credit, including losing a job, going through a divorce, facing unexpected health issues, or other unforeseen events. That’s why some of the specialist lenders we work with aim to understand the reasons behind your credit issues and try to help you in accessing the funding you need. While we may not be able to help in every situation, we’ll always do our best to find a solution if one is available.
If you’re having financial difficulties, it’s a good idea to talk to your current creditors. They might be able to offer support or alternative repayment plans. For extra help, you can contact MoneyHelper or Citizens Advice Bureau (CAB) for free advice.
Why use bad credit secured loans?
Borrowing money can give you the flexibility and freedom you need to complete your plans.
Maybe you would like to reduce your outgoings by consolidating debt. Or, you might be interested in undertaking a home improvement project, but your bad credit background is restricting access to funds. With this solution, you may be able to get the funding you need to begin your plans.
However, if you are thinking of consolidating existing borrowing, whilst your payment may be lower, this may extend the term of the debt and increase the total amount you repay.
What are the interest rates on secured loans for bad credit?
Similar to other borrowing options, you may get either fixed or variable interest rates.
The type and amount of interest you are charged depends on a variety of factors relating to your circumstances. These factors can include your borrowing amount, repayment terms, and your credit background.
Through our panel of specialist lenders, we will search over 600 products to try and find you a suitable loan. Although your options may be limited, we will always try to find you the lowest cost option we can.
How much could I borrow with a bad credit secured loan UK?
The borrowing options we have available are suitable for most circumstances and start from £20,000. Our lenders will decide how much they are willing to offer you. Therefore, the loan size will ultimately be the lender’s decision.
Before agreeing to a loan amount, your lender will consider a range of factors first to determine how much you could comfortably afford. These factors include:
- Income;
- Credit background;
- Property value;
- Amount of equity you have in your property.
To understand the amount you might be able to borrow, you can call our experts or use our online form above to enquire and we will call you.
How do I enquire?
We want to make the process of applying as smooth as possible. Here are the main steps involved in our application process.
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Step 1: Submit an enquiry
Fill out our enquiry form online or call us to speak directly to one of our advisors.
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Step 2: Speak to the team
After reviewing your enquiry, one of our experts will call you to discuss your situation.
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Step 3: We'll handle the rest
If we find you a product that fits your needs and you're happy, we'll take care of the rest for you.
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Step 4: Completion
Once all of the paperwork is completed, you will receive your funds.
