Secured Loans

Adverse Credit Secured Loans

Taking on adverse credit secured loans could be the right move for you should you be in need of a secured loan with poor credit in the UK. Debt is a common thing for people in the modern world and very much part of how we manage our finances. Taking out and paying off loans is nothing to be concerned about unless you fail to honour the payments. If this happens you could easily find yourself with the adverse condition of a poor rating which could limit the access you have to other financial products in future.

If this happens you may want to look into adverse credit secured loans. These products allow the lenders to deal with high risk customers as they are secured with an item of the borrower's property. This could be anything from a house to a car or boat, though residential property is the most common form of asset used to secured these adverse credit products. Though often seen as more risky than unsecured debt - i.e. debt which comes with no collateral - adverse credit secured loans may be the only option for you if your rating is bad. They also come with some definite benefits which make them worth considering.

Credit Ratings

There are many misconceptions about these all important ratings which govern so much of what we can and can't do financially in the UK. Some people will tell you that there is a government body who list all citizens in the UK based on their former borrowing history but no such body exists. In fact there are many, many different agencies and lenders in the UK who each have their own checking tools and people. Most lenders will contact an independent agency to check the potential creditor's history to see if it comes back adverse before offering them any sort of loans.

Each of these agencies will have their own calculations for totting up your rating. This means that just because one lender rejects you due to a poor rating, it does not mean that all other lenders will. So, you do not need to take out adverse credit secured loans just because the first lender turned you down for something unsecured. Secured may not be the only option and you should check up with other lenders before you commit to it. You may still get what you were after originally.

The Risk and Benefits

If you have been successively turned down for unsecured products due to adverse credit then it will probably be the case that you require adverse credit secured loans. These secured loans come with one major and obvious risk which makes them generally seen as undesirable - you need to put an asset on the line to be granted the product. If you default on the payments it means you lose the asset and, when you consider that asset may well be the family home, you start to see how risky this can be.

This does not take into account; however, the elements which make adverse credit secured loans less risky than those which come with no collateral. An unsecured debt offers little security for the lender so they will be keen on making sure they get as much money back from the deal as possible as soon as they can. This is simply the only way they can justify giving out money with no collateral, by charging a high rate which sees them make a near immediate profit on the deal. In practical terms this means the borrower will be charged with a high, potentially variable rate of interest and will be expected to repay in a very swift term.

Adverse credit secured loans are much better deals for the lender so they will offer you a much better deal in turn. This will usually mean a low rate of interest and a longer term of repayments meaning the two key issues for the borrower of loans - the amount paid back per month and the amount paid back in total - are both lowered. Of course secured credit does come with that adverse factor - miss payments and lose the property - but this should be weighed against the fact that you are less likely to miss payments on adverse credit secured loans.

Though most borrowers in the UK prefer to take out loans where their borrowing is not secured with an asset, there are times when adverse credit means you need to put up collateral. In many cases, however, these products can be much more beneficial to the borrower and can give much more room for them to honour the debt properly. Adverse credit secured loans are potentially very strong products. Do not rule them out.