Personal Guaranteed Loans Secured Bad Credit: For bad credit people
It is true that it is difficult to obtain a personal loan if you have a bad credit rating, but it is not an impossible task. A bad credit rating may be due to arrears, defaults, County Court Judgments, Individual Voluntary Arrangements, missed payments or bankruptcies. Your application might be rejected by high street lenders and major loan companies.
But many lenders have now realised that there is an increasing market for guaranteed loans secured bad credit.
Guaranteed loans secured bad credit not only solve credit problems of the borrower but also gives an opportunity to the borrower to improve his credit rating. Once you start repaying your loan regularly, it gets counted in your credit record and your credit rating advances towards a better picture.
Guaranteed loans secured bad credit will bear a higher rate of interest and a higher down payment than a traditional loan. The factors on which the interest rate will depend include your credit score, collateral offered, loan amount, salary drawn and so on.
There are two basic categories of guaranteed loans secured bad credit: secured and unsecured. For a secured loan, you have to offer your property as collateral whereas for an unsecured loan no collateral is required. If the value of the property that you are providing as collateral for the guaranteed loans secured bad credit are more than the loan amount, then the rate of interest to be paid can be very low. The disadvantage of a guaranteed loans secured bad credit is that the rate of interest is much higher as compared to a secured one but the term of repayment is shorter.
The higher your credit score, the easier it is for you to get favourable terms on your loan. Before applying for a loan, you need to know everything about your credit record. If you have a poor credit record, it is always wise to repair it before applying. It is advisable to try and pay off your outstanding debts before applying for guaranteed loans secured bad credit.
