Secured Loans – Lend Your Credit File A Helping Hand

Posted on October 31, 2008
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Having a bad credit history can make you look like an inferior citizen in the eyes of money-lenders. Usually this is because of a history of payment arrears, defaulting on payments, maybe even having CCJ’s against your name.

Whatever the reason, it can’t be denied that having a bad credit score adversely affects your ability to get credit in the future, even if all your debts are now paid off. Arrears can show up on your credit file for up to 3 years, and CCJ’s and bankruptcy can stay on there for as long as 6.

So with this in mind, it goes without saying that somebody with an undesirable credit score will have difficulty finding a loan for things like home improvements, holidays, weddings or anything else that requires a large sum of money fast.

This is where secured loans come in. For homeowners, a secured loan means they can borrow a large sum of money over a longer period than a standard unsecured loan – sometimes up to 25 years – and the monthly repayments will be more affordable because they are spread out. A secured loan is called that because it is secured against your assets, usually your property, and therefore gives the lender more security about retrieving their money should you default on payment. For people with bad credit, secured loans are often the only way to get money for renovations and the like.

Unfortunately, people with poor credit do end up paying higher interest rates than those with a perfect credit score, so there are lenders out there that offer secured loans specifically to people with past credit problems. These are called Bad Credit Secured Loans, and offer a lower rate of interest than a standard secured loan. The amount borrowed can be from £5000 to £75000 and taken over a term of up to 25 years, and is secured against your house, with chances of repossession if you get into arrears. Always make sure you can afford the repayments before taking out a secured loan, and shop around different companies before committing.

J Tillotson is a financial author based in the UK.

http://www.moneysupermarket.com/loans/SecuredLoansFinder.asp

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