Bad Credit Secured Homeowner Loans

There are a number of reasons why people are deemed to have a bad credit history

, maybe as a result of excessive borrowing, or having defaulted on loan or other credit payments, to name but a few. However whatever the reasons for your problems there are going to be instances where you need to arrange finance as a result of an emergency. It may be because of a medical emergency, your car may have gone wrong, or you might have some school fees to pay for your children, or even need to carry out some emergency repairs to your home. Whatever the reason, you may feel that having a less than perfect credit history will prevent you from attaining the credit you need.

This is not always the case however. If you are a homeowner and have sufficient equity in your home you may be able to avail yourself of a bad credit secured homeowner loan. This type of loan has been specifically set up to allow homeowners to borrow money secured on the equity in their property. This means that your adverse credit history will not get in the way of you borrowing money. Because the loan is secured on your property the lender feels more comfortable lending you the money, as he is more likely to get it back. He can force the sale of your property if you do not make regular payments.

Bad credit need not be a stumbling block when applying for a loan!

Just because you are a homeowner and have equity in your home that still does not guarantee that the lender will approve your loan. You will need to prove your income, which will need to be sufficient to justify the repayments; the lender will also have to undertake a valuation of your property, usually at their expense to make sure the property contains sufficient equity to cover the value of the loan. They will also look at any outstanding debts that you may have and assuming here are some they may insist on you consolidation them into your new loan so long as everything else fits.

What if I do not want a Secured Loan or I am not a homeowner?

Depending on how bad your credit record is, and or how much you want to borrow, you may be able to arrange an unsecured bad credit loan. There are a number of options open to you with regards to unsecured bad credit loans, but the loan amounts available are going to smaller than those for a secured loan, and the interest rates available are going to be significantly higher. The other main problem with an unsecured loan is the fact that they cannot be taken out for terms longer than 60 months or 5 years; which usually makes the repayments that little bit more expensive when you take into account the higher interest rates that are charged.

by: Mark Dawson

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