When a person is affected with serious credit problems and is tagged with CCJs, IVA, defaults, arrears etc against the name, availing financial assistance from lenders is a distant dream. Due to these the person looses the credibility and confidence of the lender. It means that even if he wants to apply for loans, loan providers will not comply. To bail out these borrowers, lenders are now offering bad credit loans designed specifically to provide finance without worrying about the credit status.
Bad credit loans as the name refers are meant only for the borrowers whose credit record is not up to the mark. With the finances obtained, loan applicant can serve it to meet various demands like up gradation of business, home renovation, going for holidays, paying education fees for child, wedding and even paying off the debts.
These loans are offered by the lenders in secured and unsecured form. A borrower who does not have any problems to place any asset as a security can opt for the secured form. The amount obtained is based on the equity value of collateral. The repayment duration for this option of loans is quite comfortable as it stretches for a period of 5-25 years.
On the other hand, unsecured option of these loans can be accessed without any collateral. These loans offer comparatively smaller amount of money that requires to be paid back in a period of 6months- 10 years. Lenders approve the loan amount on the basis of borrower's monthly income and employment status.
The rates of interest for the loans are quite higher. This is because the lenders approve the loans in spite of the bad credit histories of the borrower. However if the borrower opts for the secured option, then he can certainly gain low rates. However, searching for lenders using the online application also helps to achieve low rates.
One benefit of availing bad credit loans is that, it helps the borrower to restore and stabilize the financial condition. By revamping the financial condition which can be done by paying back the loan amount, he can elevate the credit score. This also paves the way for him to avail future financial assistance at comfortable rates. This loan is of immense help to borrowers as it bails it out of a very tight situation.
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