There have been fewer lenders in the secured loans market since the credit crunch took hold of the world economy, which has made it more difficult for people to find the money they need when they need it.
The purpose of this article is to give people the information they need to help them get the best deal that they can in these difficult times.
It will also hopefully prevent them from making too many applications for finance that they are not going to qualify and therefore prevent them from harming their credit record further.
As too many declined applications on the credit report will actually harm their chances of securing the finance that they need.
Secured loans are still available to all kinds of people, even those that have a less than perfect credit record.
However in order to do so they must meet all the qualifying criteria that the lenders are working to.
Secured loans with a good credit record.
If you have a good credit record with enough income and enough equity in your home then you should still be able to find a secured loan at the best rate.
The best rates are available for people that do not to exceed more than 65% LTV (Loan To Value).
This means that the total amount of secured borrowing does not exceed 65% of the value of their property; this will include the amount outstanding on your mortgage as well as what they want to borrow on the new loan.
So if you have a house that is worth £100,000 with a mortgage outstanding of £35,000 you can borrow another £30,000 and still qualify for the best rate that is currently available.
Although anybody with a good credit record can still borrow up to 85% LTV if you are above the 65% then the interest rates that are charged will be slightly higher than if you stayed below that level.
You will also need to have enough income to justify the loan repayments, most lenders will require that your total repayments on any outstanding debts including your mortgage and any other finance that you make payments to does not exceed more than 40% of your monthly income.
This is why it makes sense to consolidate any outstanding credit card balances and or any unsecured loans into your new secured loan to keep the debt to income ratio as low as possible.
Doing this will make the lending proposition that much more attractive to the lenders.
Secured loans with bad credit.
There are still lenders in the market that will offer secured loans to people whose credit history is not the best, including those of us who may have CCJ's (County Court Judgements) and defaults.
However because lending to anybody in this situation represents more risk to the lenders they will charge higher rates and will restrict the amount that you can borrow dependant on the value of your property.
For example bad credit secured loans are only available up to a maximum LTV of 70%.
Again apart from the equity restrictions that are imposed the lenders will still need to see evidence of sufficient income to cover the repayments, again using the 40% of your income must cover all your debt repayments.
If you feel that you meet the requirements detailed above and would like to apply for a secured loan, the most sensible option would be to apply through a reputable secured loans broker.
The reason for this is that most of the lenders will only accept applications through a broker, and apart from that a good broker will have access to all the products available from all of the lenders.
As such they will be able to readily identify the best lender to submit your application to.
This will give you the best chance of securing the loan you need at the best rate available for your circumstances.