In the past, secured loans for people with bad credit were looked down on a bit. Now they make sense, and we should be happy about that. Official UK numbers show why!
CreditAction.org.uk says that "At the end of December 2005, people in the UK owed a total of GBP1,158 billion." In December 2005, the total amount of secured loans for homes was GBP965.2bn. In the last year, this has gone up by 10.4 percent. This is while the average amount of debt for a British consumer is GBP7,786, and that doesn't include mortgages.
In the past five years, the average amount that a household borrows through credit cards, car loans, and shopping loans has gone up five times. In November 2005, the average house price in the UK was GBP186,431 (source: Office of DPM).
The numbers say everything you need to know. The much higher interest rates on credit cards, auto loans, and retail financing (store cards, etc.) take a huge chunk out of the average person's monthly income. The only sensible way to move forward is very clear. By putting up their property as security, consumers can turn credit with high interest rates into credit with lower interest rates. Even if someone has bad credit, it makes more sense to pay back the same amount of money at a lower interest rate through a secured bad credit loan.
Now, there are new ways to borrow money that take all situations into account. In the last ten years or so, this new market for secured bad credit loans has grown, and it has grown outside of the main High Street lenders. As long as people have property, they can borrow as much money as they want to pay off other loans. Nor do smart consumers have to pay the high interest rates that people with bad credit used to have to pay.
Wouldn't it be better to pay GBP60 a month to pay off that debt instead of GBP150 a month to pay off the same debt? Secured bad credit loans give people this chance.
Credit management has gotten better, so loan companies are more likely to consider secured bad credit loans now, when they wouldn't have been able to do so before. Especially with the new way of thinking about self-certification, people who work for themselves are not treated the same way as they used to be. People who want to work for themselves no longer have to have their books checked for the past three years. People with County Court Judgments, Individual Voluntary Arrangements, people who have broken past or current financial agreements, and even discharged bankrupts are now usually taken into account in the changing world of finance.
More and more people, especially those in business and with an entrepreneurial spirit, are taking bigger financial risks. The market for secured bad credit loans is growing to take that into account, because it has to. Borrowers should never get a secured loan if they aren't sure they can pay it back. These people should look into financial products that don't have to be paid back (which are more expensive).
But CreditAction.org.uk says that the average house price in the UK is GBP186,431 (GBP195,319 in England). Every year, house prices in the United Kingdom went up by 2.5%. London's house prices went up by 2.2% every year. ' Most people, no matter how good or bad their credit is, should look into getting a secured credit loan to put all that money to good use.
