Many of our customers want a loan to help them repair their credit file or they need a loan whilst their credit history repairs itself naturally over time. There is normally a good reason why their credit file has been damaged by arrears, defaults or court judgements and the loan is usually taken out after the problem has been resolved but before the resultant poor credit has fallen off the credit register.
At Promise we will assess your circumstances and give you full advice on suitable secured second charge loans.
- To talk about your requirements call 01902 585020
- For a quote, complete our “Get Fast Quote” form opposite and we will search the market for you
- For more information see below
All circumstances are considered and we give you common sense help when you need it. We have the most advanced loan sourcing system in the UK but our people are even more impressive and our greatest asset.
Debt Loans or Bad Debt Loans
Debt loans or bad debt loans have no defined meaning in the finance world. However the phrase normally is associated with borrowers who have credit problems and want to borrow more money.
Borrowing more – careful you don’t make matters worse
If you have bad credit, borrowing more is not normally a good idea unless the purpose of that borrowing is to improve your financial position in some way, such as reducing debt or making the payments on existing debt more manageable. However those wishing to borrow more for consolidation may find it more difficult with a mortgage or an unsecured loan from a high street lender. Their options are therefore often limited to a secured loan (assuming they are homeowners). A secured loan will be much cheaper than the unsecured option if you have a poor credit history. The downside of the secured option is that the borrower’s home will be at risk if they don’t make the payments. The down side of the unsecured option is the rates can be very high and the repayment terms very short so affordability can become a problem which ends in a spiral of debt – borrowing more to repay the previous loan. In both cases borrowers should be cautious and think if borrowing is going to help their long term position or make it worse.
Examples of making matters worse:
- Borrowing more to go on holiday but can’t afford existing commitments.
- Borrowing to buy a new car (just because you fancy a change) rather than trying to pay off existing debt.
- Using the proceeds of an expensive new loan to make the repayments on other credit (Robbing Peter to pay Paul). Unless there is some very good news just around the corner (usually a pile of cash) this strategy is just delaying the inevitable which will be an even bigger problem as a result of the extra borrowing.
Borrowing more – use the money to improve your position
The means by which the money is obtained doesn’t differ greatly from the examples above – secured lending is generally cheaper and larger loan amounts can be obtained. The difference is that the prudent borrower uses the loan to make them money, save them money or improve their cash flow.
Here are few examples when borrowing can make sense even if you have bad credit:
- The self employed person who borrows to buy stock and sell at a profit.
- The person who needs a car to secure a better paying job.
- The person who wants to reduce the monthly cost of existing credit so they can get up to date and start paying their mortgage and loans again on time – this is a form of credit repair.
- The person who wants to wipe the slate clean, may be in serious debt – advanced credit repair
Consolidating unsecured credit with a longer term Secured loan can reduce your monthly outgoing but may cost you more in interest if you keep the loan for the full term. However you can settle the loan early if you are able to.