Borrowers with bad credit history often have to face a lot of problems when they apply for a loan product of any kind. In UK, there are quite a lot of high street banks and popular finance companies that offer attractive loan deals.
However, these loans are available exclusively to borrowers with a decent credit history which makes it a little difficult for borrowers with bad credit.
Even though it may take some time and a little effort, it is still possible to find good loan deals for bad credit borrowers.
Bad credit history loans are offered by several online loan companies and sub prime lenders that cater to this borrower profile specifically.
One of the options available in bad credit history loans are the unsecured loans. The unsecured loans are smaller in size and are generally short term funds which can be used for any purpose. These loans are offered by loan companies like Blackhorse
Finance, Platinum Loans, Alliance and Leicester, Sainsbury’s, Santander etc. With unsecured bad credit history loan, you will be able to borrow an amount of GBP 1000 to 15,000 and in rare cases up to 25,000. These loans are only offered for a repayment term of up to 6 to 8 years in most cases.
One of the main things that borrowers should remember about unsecured bad credit history loans is that the interest rates on these loans would be higher compared to secured loans since no collateral is offered. However, these loans are perfect for tenants that do not have any asset to offer to lenders.
Secured bad credit history loans are available to homeowners who require a higher amount of funds. These loans are the ones in which the home of the borrower would be secured against the amount which is borrowed. The repayment term is higher for secured loans and depending on the amount borrowed, it can be up to 15 to 20 years.
The amount that can be borrowed can be up to GBP 50,000 depending on the available equity on the property that has to be secured. Some of the lenders that offer secured bad credit history loans are Link Finance, Blackhorse Personal Finance and Nemo Personal Finance.
Even though the interest rate on secured bad credit history loans is lower, the biggest risk is that your home will be secured. If you fail to make regular payments there is always the risk of property getting repossessed by the lender.