The introduction of internet has revolutionized the financial industry, not only increasing the types of loans available, but making them much more accessible as well.
One sector of the financial industry has impacted massively by the internet is unsecured market and more specialized lenders who offer loans to people with bad credit. Because of this, has introduced a question; is there any such thing as a bad credit secured loan?
Currently, there is no such thing purely on the basis that it would be a loan that is not liable to be companies lend money to everyone who applies, there are however a number of options available for those looking for bad credit loans without collateral, here's an overview of each -masing options:
loan guarantor
A bad credit loan specialists offer amounted ranging from £ 1000 to £ 5000 for a period of 1 to 5 years. Guarantor loans require surety homeowners to support the application long term monthly guaranteed installment loans from direct lenders should the borrower fail to do so. As the mentioned guarantor must be a homeowner, they must also receive a regular income and have good credit. The lender will perform a number of checks on the applicant regarding both their credit history and income and expenditure. Each lender will have criteria for applicant and guarantor of a different but if they do not have enough evidence affordable loan they will not lend.
Some lenders are now offering products tenant guarantor, guarantor loans are similar to normal, they will require the guarantor to support the application, the difference is; the guarantor may be a tenant or non-homeowner. This process is similar but the applicant and guarantor criteria tend to be tight because there is no guarantor of homeowners.
installment loans
A relatively new product that offers a small amount of cash for a flexible period of time. Most lenders will lend installments between £ 100 and £ 1000 for a period of 1 to 12 months. installment loans do not require a guarantor that does not mean the price will be slightly higher than the loan guarantor. As mentioned, the flexible loan term, but will depend on the affordability of the mortgage.
Payday loans
A popular product among people with bad credit because of the speed of decisions and payments. All payday lenders will be based online, and will offer between £ 20 and £ 500 and are designed to be repaid on the next payday of the borrower. With the process of becoming a 100% online payday, it means that both the credit and affordability checks automatically as opposed to manually borne. Because the lender will boast a 10-minute time of the decision and all the good things money can be transferred into the borrower's bank account within one hour.
As you can see, each type of loan will carry out some form of credit and affordability checks to assess that they lend responsibly. In general, payday loans have the highest approval level; But they are far from bad credit secured loans. All in all, it is unlikely that a bad credit secured loan will be something that every lender will offer, especially because of the risks involved for both the lender and the borrower.
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