Secured Bad Credit
Loans Make Sense
Secured bad credit loans
used to be looked upon with some derision in years gone by.
Now they are becoming the norm, and we should be glad. Here
are seven good reasons why we should all cheer up about it!
1. There is so much credit being offered and people are
increasingly finding that credit references are being recorded
as a matter of course. This should be taken as a good thing
as it leads away from conventional lending by the banks
and opens up a more diversified lending system for all
of us which covers a much wider market.
2. Banks are therefore not the only source. Banks like to
have as much security as possible, so they can afford to
pick and choose whom they lend to. But having a 'one size
fits all’ approach is definitely not good news
for the majority of us, because we are all different. Knowing
that banks can be this choosy means that we are free to go
elsewhere. So in the long run the laws of the market have
provided us with a greater variety of sources when it comes
to secured adverse or bad credit loans.
3. Secured loans are usually cheaper – sometimes much
cheaper – than unsecured loans. This is because of
the risk aspect. If a lender knows that the loan amount is
tied into the borrower’s property then he knows that
the borrower has an extra commitment to keep a roof over
his or her head. Therefore the cost of borrowing through
a secured loan is going to be significantly less for that
reason. Simply, the APR figure will be lower. This can be
seen clearly on any loan advertising material.
4. Longer repayment periods. Hand in hand with the fact
that the loan will be cheaper, the repayment period can usually
be set longer and so the monthly repayments will be significantly
reduced for that reason (although economies of shorter borrowing
times should also be taken into account).
5. Personal service. While the secured loan will involve
more procedures and will usually take longer, you are likely
to get a more personal service than with an unsecured loan,
where the application process is often as anodyne and faceless
as one simple application form. Most consumers like to be
treated as real people than just numbers or prospects.
6. The diversity of secured loans available. As well as
conventional secured loans for any purpose, specialist plans
for different types of loan have also grown up. Non-status
loans, debt consolidation loans, and both personal and business
advances are examples. Special plans will usually also exist
if the property your loan is secured on is in some way different.
For example, brick and tile is the preferred form of construction,
but if your home is concrete based, or timber, or even has
a thatched roof special plans are there if you seek them
out.
7. More circumstances are considered. Improvements in financial
risk management assessment have meant that lenders are prepared
to consider secured bad credit loans where such a thing was
not conceivable in the past. The self-employed, in particular,
are not treated as they used to be, especially with the new
attitude towards self-certification. Three years of audited
accounts are no longer automatically required from those
people who work for themselves. Defaulters, people with CCJs,
IVAs and even discharged bankrupts are now regularly considered
in today’s changing world of finance. Increasingly
people take bigger financial risks, especially the entrepreneurial
minded. The market is expanding to take account of that,
because it has to. |
