Unsecured loans are so hard to get when you have a bad credit rating because it is this rating that the lender holds in such high regard when deciding whether to give you a loan or not. If you have a history which shows that your money handling skills are less than perfect its a sign that you may have trouble paying any loan back.
To get round the difficulty in finding an unsecured loan many people with a bad credit rating are resorting to applying for secured loans. A secured loan is one which you use an asset which you own as collateral for the borrowed money. This most often occurs when a house is re mortgaged when you have paid off part or all of your loan or the house has risen in value since purchase. You take out mortgage for the new value of the house and the bank gives you the difference as a loan.
If you don't own your home then obviously the re-mortgaging route is closed to you but you could still get access to secured credit through the use of log book loans. Log book loans require you to put your car down as collateral for a loan and the lender will give you a cash loan dependent on the vehicles value. Log book loans have a very high interest rate compared to mortgage loans and therefore should only be used in an emergency.
Of course if you fail to keep up with repayments on a secured loan then the possession you have used as collateral is likely to be repossessed by the lender. Always make sure you will have the means to pay back all the money you owe for the duration of the loan agreement.
George_Barclay
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