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Debt consolidation, home improvement

5 Things You Never Knew About Adverse Credit Secured Homeowner Loans

Have you experienced credit problems?

If so, you are not alone. According to Credit Action, someone in the UK will be declared insolvent or bankrupt every 3.78 minutes and there is a property repossessed every 14 minutes. 1,359 Consumer County Court Judgements (CCJs) were issued every day during the second quarter of 2010 and the average judgement amount was £4,063.

Whether it’s an argument over a £100 bill, bankruptcy, mortgage arrears or just late payments on credit cards or personal loans, adverse credit affects thousands of people in the UK. If you have a blemish on your credit file, it can be difficult to obtain the finance you need for everything from a new mobile phone to a new car or home.

An adverse credit secured homeowner loan could therefore be a solution. Here’s our guide to 5 things you never knew about adverse credit secured loans.

1. They can be used for almost any purpose

One of the main benefits of secured homeowner loans is that they can be used for almost any purpose. Common reasons that people borrow money secured against the equity in their home include:

  • Home improvements and redecoration – everything from an extension or conservatory to loft conversions, new kitchens and bathrooms
  • New car, SUV, truck or motorcycle
  • Consolidating more expensive debts such as credit cards or personal loans
  • Specific one-off expenses such as Christmas gifts, a wedding or plastic surgery

2. It doesn’t matter if you have experienced credit problems in the past

Many thousands of people have experienced credit problems. These can range from a late payment on a credit card to bankruptcy or home repossession. Credit issues remain on your file for up to six years and can affect the chances of you being approved for finance.

However, an adverse credit secured homeowner loan takes these issues into account. You won’t be automatically refused for a loan simply as you may have experienced credit problems in the past. As the loan is secured on your home, the lender has the security that they can get their money back through the sale of your property in the future. This means they are far more amenable to lending to borrowers who have had credit issues in the past.

3. They are often easier to obtain than unsecured loans

Unsecured loans are a riskier form of lending as the lender has no collateral on which to claim if you fail to keep up your repayments. So, the criteria for getting an unsecured loan tend to be much stricter.

Adverse credit homeowner loans are therefore typically easier to obtain than secured loans as the credit requirements and underwriting criteria are less strict.

4. They can help you improve your credit rating

Adverse credit secured homeowner loans can actually help you rebuild your credit rating. If you pay your loan on time, every month, your credit file will show that you are capable of responsibly managing personal debt.

5. You sometimes won’t need to prove your income

Many people find it hard to prove their true income. For example, you may be self-employed or in an industry with irregular commission or bonuses. This can make it hard to obtain a loan with many banks as you can’t always prove exactly what your income is.

Many adverse credit secured homeowner loans do not require you to prove your earnings. They work on a ‘self-cert’ basis, meaning you simply declare to a lender that your income is at the stated level.

To use your home to raise money at a competitive APR, please fill this homeowner loan form.

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