Bad credit secured loans are for people who own their own property as they will have to secure the loan against their home. When applying for one of these loans there are some loan companies who will not do a credit check. Also some banks and lenders provide this type of loan if you are wanting to borrow over £25,000, although if for some reason you can not make the repayments, you run the risk of losing your property. The length of time you can get to pay back these loans is around 5-25 years, depending on how much you borrow. These bad credit secured loans have quite low interest rates compared to bad credit unsecured loans. If your credit rating is very bad you may not even qualify for a unsecured loan, so chances are that you would have to apply for the secured loan anyway.
How Much Can You Borrow
Bad credit secured loans can range from £3,000-£50,000 but in some cases you may be able to get up to £100,000 depending on how much you earn and how new your CCJ's are. The typical APR of these loans are on average around 17.9% going up to about 70%. The repayments of these bad credit secured loans will be fixed monthly payments that will eventually improve your credit rating.
Advantages of Bad Credit Secured Loans
The advantages of bad credit secured loans are that some loan companies will offer you the chance to repay your loan quicker by paying more than minimum amount due. Also if you have CCJ's, arrears or defaults on your credit report, you may still be accepted for a secured loan. The interest rates of bad credit secured loans are a lot lower than bad credit unsecured loans, so you will not pay back as much interest. Also some loan companies will not charge you set up fees which will save you a lot of money. When you get your secured loan, you can take your payment plan for up to 25 years depending on how much loan you borrow.
Disadvantages of bad credit secured loans
The disadvantages of bad credit secured loans are that you have to use your home as collateral and if for any reason you cant make the repayments, you will be taken to court and you will lose your home. Also a bad credit secured loan can mean you can be in debt to the loan company for a long time. As these loans are bad credit loans, the interest rate is a lot higher than a normal secured loan. Another disadvantage is that it will take a few weeks to get your claim processed and issued to you.