Secured Loans Are Available Nevertheless With No Credit Checks

Bad credit history will not stop a homeowner from being accepted for a secured loan – questions may be asked, such as why the loan is needed, but the lenders will not be interested in the answers. All that is interested in the matter nowadays is that the loan will be repaid and get on with the financial situation.

A secured loan is one of those financial deals that not only hold the promise of the lender to make repayments on time but is stretched out over the maximum loan term to make it affordable. This arrangement is also convenient for both parties, as it benefits the lender financially, as they are given enough of a profit on the deal, and it offers enough time for the homeowner to recover financially.

Currently, these secured loans are typically no credit check loans granted against the home. This means that the homeowner – whether a first-time buyer or a homeowner with a seemingly blemish on their credit history – to be accepted, they must have an asset to use to act as the collateral, usually a home. The reason secured loans with no credit check are used for if these requirements were in place when the finance was originally set up would be to set the terms now.

Fixed TermNormally

Fixed-term loan requirements, such as 30-year loans, loans that have penalties within the term, and even loans that are variable, are all obviously easier for the borrower to handle. But there are some varying factors relating to affordability that should be taken into consideration.

Basically, loans designed for homeowners when they are taking a mortgage for the longest possible duration are the safest. This is because the home may well increase in value, as is so often the case, and a homeowner may have better long-term prospects with such a mortgage program.

The real downside of these deals is that the amount that is borrowed is not necessarily affordable and may well place added pressure on the family budget.

Longer Terms

As latterly said, lenders are more likely to want a guaranteed monthly repayment even in the worst of times for the borrower, which leads to a compromise, cutting back and suspending repayments for the time being. By lengthening the payback period, allows the borrower to absorb the sudden shocks if they have been hit with unemployment or a single bad financial event.

It is essential that the security provided for the loans is good. Whilst equity in a property is a popular form of security; it is also always a good idea to have other methods in place, such as residential or third-charge loans.

On that note, the equity in the home can easily prove to be a source of funds to help get over a sticky time. If the payments are not made, then the property is at risk of repossession by the lender.

Compromises

The easiest way to access a secured loan without a credit check is to consider third charge loans. This means that the rate offered may not be as attractive as a major credit card, but the tried and tested track record of a homeowner should be sufficient in terms of security. This is because the repayment period is naturally shorter and, therefore, easier to deal with.

One disadvantage is that the loan limits are usually modest, but it should not be assumed that this would be traditional money lending. As far as secured loans or loans of this nature are concerned, the limit is usually around £5,000, depending on the lender and the value of the asset used as collateral.

It should also be pointed out that interest rates are usually on the higher side and can be quite high, but when added to the cost of the loan, makes it is attractive in the case of higher risk.