Bad credit – Not the restricting factor it was as UK Secured Loan lenders increase risk appetite

SUTTON COLDFIELD, U.K. - April 29, 2013 - PRLog -- Many people in the UK have or have had bad credit registered against them at some point in the past, in some instances due to circumstances beyond their control. The terms ‘Bad Credit’, ‘Adverse Credit’, ‘Poor Credit’ are all used to describe the credit rating of individuals who have encountered one or more of a range of financial difficulties in the past. The problems encountered can include: paying credit payments late, missing credit or mortgage payments, defaulting on credit accounts, being issued with County Court Judgements (CCJ’s) for non-payment of debt, entering into debt management plans where a third party company manages a number of debts on behalf of an individual, Individual Voluntary Arrangements (IVA’s) and Bankruptcy.

Clearly there are varying degrees of bad credit all of which are viewed differently by secured loan lenders in the UK. The view taken by different secured loan lenders varies significantly from those who will not accept customers who have missed or been late on any credit or mortgage payments in the last 3 years to those who, given the correct circumstances, will consider applications from people who have had severe credit problems and are struggling to manage their mortgage and other credit. A number of UK secured loan lenders has specific product ranges designed for people with bad credit which are appropriately named, some of which include: Bad credit secured loans, Adverse credit secured loans, Poor credit secured loans and Credit repair secured loans, to name but a few.

As one might expect loans advanced to people who have bad credit are generally more expensive than those issued to people who have never had any problems with credit, but the good news is that these rates are also coming down gradually as lenders once again look to widen their lending spectrum to a bigger audience, including those with bad credit. The UK secured loan market has started to evolve again with product development and competitive pricing high on the agenda of many lenders.

Secured loans have gradually become an accepted alternative to remortgages and this acceptance is highlighted more so in the bad credit section of the market as many people with bad credit either cannot obtain a remortgage or do not want to change their mortgage as it was taken out on a good rate before they collected the bad credit. Many secured loans in the UK are used for consolidation of existing credit and debt, or at least have an element used for this purpose, as people look to reduce their monthly outgoings into one manageable monthly repayment and hopefully improve their future credit rating.

Bad credit secured loans are available to people from all walks of life in the UK, although stricter checks are made by the lender to ensure that the new loan is actually putting the customer in a better position and is not adding to their existing problems. One of the key criteria considered by secured loan lenders is the affordability of the loan as it is important, with the loan being secured against their property, that the customer can afford the payments now and in the future. Having ample security for the loan is no longer sufficient in itself, although it again is a key consideration when secured loans lenders make decisions whether to lend to an individual or not.

The majority of secured loans in the UK are only accessible through a loan broker or mortgage broker as these are the chosen distribution methods of the lenders in this market. One of the key benefits of using a loan broker or mortgage broker is that they will be able to view and access most if not all of the lenders available so will be able to provide the best loan to match each person’s individual circumstances and needs. Some brokers specialise in bad credit loans or bad credit mortgages so cannot service customers with a clean credit history whereas whole of market brokers will normally be able to provide products for people with a wide variety of credit ratings.

A Bad credit remortgage may be an alternative or better solution for some people so using a broker who has access to both bad credit secured loans and bad credit remortgages should ensure that the most appropriate solution to meet their individual circumstances and needs is found. A Bad credit remortgage will involve clearing the existing mortgage along with any other debt with a new mortgage from a new lender. Again, as with bad credit secured loans, the rates offered by mortgage lenders who provide bad credit remortgages are often higher than for those people who have never had bad credit. Like secured loans there are specialist lenders in the mortgage market who have designed products specifically for people with bad credit, which include: bad credit remortgages, adverse credit remortgages, poor credit remortgages and credit repair mortgages.

Understanding which is the best way to go for people with bad credit is often very difficult and even if they do know which way they wish to go, accessing the correct and best products if often just as difficult without the help of a loan broker or mortgage broker. For no obligation help and assistance from a whole of market broker visit http://www.caboodlefinance.co.uk/

For more information about bad credit secured loans in the UK visit http://www.caboodlefinance.co.uk/Index.asp?T=Loans-Bad-Credit-Loan

For help and advice on bad credit remortgages visit http://www.caboodlefinance.co.uk/Index.asp?T=Mortgages-Adverse-Credit-Mortgages