Are Secured Loans Easier To Get

Secured loans may be easier to get than unsecured loans for large amounts. When an asset acts as security on a loan, the risk to lenders is reduced – so your chances of approval may be higher.

Securing a loan against a house or car means lower risk for the lender compared with unsecured loans. This means lenders may rely less on factors like your credit score when considering your application.

So if you own a valuable asset like a house (or are repaying the mortgage on one), but your credit score is low, a ‘bad credit’ secured loan may be a suitable option.

• By using an asset when applying for a secured homeowner loan, the risk to lenders is lower.
• This may make it easier to get a secured loan than an unsecured loan.
• If you have bad credit, it won’t necessarily prevent you from being approved.
• Secured loans may be more suitable than unsecured loans for large amounts.
• Repayment periods on secured loans may be longer than unsecured loans – see long term loans for bad credit.
• Reduced risk is often reflected in the Annual Percentage Rate of Charge(APRC).

By offering security and lowering the risk to lenders, the chances of being approved for a secured loan could be higher – compared with an unsecured loan. It means your credit score is often not a decisive factor in assessing your application. That could make a secured loan a suitable option if you have bad credit.

A lender will also consider other factors when assessing your application. This will include your income and expenditure. The lender may need evidence of both to ensure the loan is affordable to you – now and throughout the term of the loan.