Bad credit history loan secured
Anyone taking a loan has almost 50% probability of non repayment. Some customers have a history of missed payments, defaults and CCJs which create a bad credit history. The financial companies and banks have understood that there are a huge number of people with bad credit history and they have designed loan products to suit such customers.
One such loan is bad credit history secured loans.To understand the bad credit history secured loans let us first understand what is bad credit history. Bad credit history is based on credit rating of the customer who takes the loan.
Credit rating is done on the basis of good payment record and bad payment record. Bad payment record is one in which the customer has had a number of missed payments, defaults and even CCJs. Credit rating is a numerical value given to the good payments and bad payments.
A person with low numerical score in credit rating is said to have a bad credit rating and the vice versa. In the past those with bad credit rating could not avail further loans for any purpose. It would make them ineligible for these loans. The loan companies found that there is a market for such people who had bad credit history and would like to avail loans and they designed loan products for such customers. Ad credit history secured loans is one such loan product. Here those with bad credit history and who can give a collateral security can avail loans.
The interest rate for these loans is generally higher than the secured loans offered. The reason for the high interest rate is because of the risk involved in the loan. Those with bad credit history are considered as high risk category than those with good credit history. To reduce the risk of non payment the banks and financial institutions charge higher interest rate for the loan products. The customer is also at advantage on taking the bad credit history secured loans. On making proper payments they can improve their credit rating and thereby become eligible for the further loans.Bad credit history secured loans are here to stay and help those with bad credit history and solve their financial crisis.
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