Why Secured Loans Are Great For People With Bad Credit
Many people are often unable to get an unsecured loan due to their credit history. Unlike with the secured option, an unsecured loan carries far more of a risk to the lender and a decision is only made on the lenders calculated risk assessment that the applicant will be able to repay the loan. The lender will usually do this by asking one or more of the credit reference agencies to run a check on the applicants previous borrowing history to determine whether or not they pose a risk to the lender in terms of their ability to repay.
The credit reference agencies have full details of all of our current and previous borrowing records. Therefore, payment arrears, CCJs, default notices etc will all contribute to your financial profile and an unsecured loan application can be turned down on the grounds of any of the above. In fact, even one or two late payments on a mobile phone contract bill can be sufficient grounds to refuse an application for an unsecured loan.
Secured loans are great for people with bad credit as they are more readily available. Usually, a secured loan will be made available to a...
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