Can I Get a Homeowner Secured Loans if I Have a Poor Credit Rating?

If you’re wondering if you can still get a homeowner loan even if you have a poor credit rating, you should know that the answer to the question is “it’s possible”, however, there are some conditions.

Understanding What is Expected

In order to understand what we mean, we must first understand what a homeowner loan is. A

homeowner loan is a secured loan whereby you use your house as a guarantee that you will be able to repay your loan. 

With a good credit rating, you can get a large loan amount at low interest rates and longer payment terms. How much money you can get on a loan really depends on the equity of your house, which is equivalent to your home’s value minus any mortgages and loans. The interest rate, on the other hand, is variable and largely depends on the borrower’s credit rating. Obviously, with bad credit rating, you will need to pay for a higher interest rate.

Exploring Your Options

While there’s no guarantee that traditional financial institutions like banks will grant you a loan, there are many non-banking lending institutions out there that would be willing to loan money to you. But again, as we said, be prepared to pay higher interest rates. 

If you've been suffering from a bad credit rating, you would do well to repair your score first before applying for a loan if you’re not using the money for any emergency. A bit of research will help you to identify some tips to help you to rebuild your score.

Contact Lenders Directly

You can contact lenders one by one and present your case, or you could also get in touch with a loan

broker or specialist. Between the two, we suggest that you do the latter. Specialists and brokers typically have many lenders in their list, and if you talk to them about your case, they will find the appropriate lender for you. Not only that, they will also do the necessary paper and administrative work so you only need to wait for the money to be released.

Resources

If you are thinking of turning to this type of finance because you are faced with mounting debt, the following video will help to break down the best ways to face up to this problem and offer advice on moving forward.

• The following Citizens Advice Bureau article provides a little insight into the decision making process that lenders go through when deciding whether to grant a loan application or not - http://www.adviceguide.org.uk/wales/debt_w/debt_borrowing_money_e/how_lenders_decide_whether_to_give_you_credit.htm
• If you are still unsure how important having a good credit score is, the following Investopedia article explores this is much greater depth - http://www.investopedia.com/articles/00/091800.asp

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