Secured Bad Credit Loans Make Sense

Secured bad credit loans used to be looked upon with some
derision in years gone by Now they make complete sense, and we
should be glad Official UK figures show us why!

According to CreditActionorguk ‘At the end of December 2005
the total UK personal debt was £1,158bn Total secured lending
on homes in December 2005 was £9652bn This has increased 104%
in the last 12 months’ This is while the average UK household
debt is £7,786, and that is excluding mortgages

Average consumer borrowing via credit cards, motor and retail
finance deals has grown five fold in 5 years Yet the average
house price in the UK in November 2005 stood at £186,431
(source: Office of Deputy Prime Minister)

The figures speak for themselves The much higher interest rates
payable on credit cards, motor and retail finance (store cards
and the like) are taking a huge chunk out of the average
person’s monthly budget The only sensible way forward is quite
clear Consumers need to convert the high interest debt into low
interest debt by using their property as security Even if
people’s credit rating is quite poor it makes more sense to pay
off the same amount of money at a lower interest rate by means
of a secured bad credit loan

Now new lending sources are springing up which take into account
all circumstances This new market for secured bad credit loans
has opened up in the last few years, and it has grown outside of
the mainstay of the High Street banks As long as consumers have
property then they can raise as much cash as they like to pay
off existing debts Nor do people have to pay the exorbitant
interest rates that used to be the case with people whose credit
rating was not perfect

Would it not make sense to pay £60 a month in servicing that
debt than £150 a month servicing exactly the same debt? Secured
bad credit loans provide that opportunity

Improvements in financial risk management assessment mean that
lenders are quite prepared to consider secured bad credit loans
where they were not acceptable in the past The self-employed,
in particular, are not treated as they used to be, especially
with the new attitude towards self-certification Three years of
audited accounts are no longer automatically required from
people who choose to work for themselves People with CCJs,
IVAs, those who have defaulted on past or existing credit
agreements and even discharged bankrupts are now regularly
considered in today’s changing world of finance

Increasingly people are taking bigger financial risks,
especially those in business and the entrepreneurial minded The
secured bad credit loans market is expanding to take account of
that because it has to Of course, consumers should not consider
secured loans if they are not absolutely sure they can meet the
repayments Those people should look at unsecured loans (which
are more expensive)

But, as CreditActionorguk states, the average value of a house
in the UK is ‘£186,431 (£195,319 in England) UK annual house
price inflation rose by 25% Annual house price inflation in
London was 22%’ Putting all that capital to good use by means
of a secured credit loan is an option most consumers would
consider, whatever their credit rating

Tags | credit, debt, derision, Finance, loans, management, result, secured