Far too many people who have a legitimate need for a UK secured loan have been denied approval for having a bad credit history, or not enough credit. Some companies try to work with people to get them a bad credit secured loan that has bigger fees and increased interest, but it does not have to be this way.
Certain companies can provide a logbook loan without even glancing at a credit report. Admittedly, the interest rates are higher than more traditional personal loans, due to the riskiness of lending without checking the credit history, but in accordance with the laws regarding a UK secured loan the interest rates are expressed as the representative APR, or annual percentage rate. The APR of a bad credit secured loan is the amount of interest the initial balance of the loan will incur in one years’ time. The representative APR is the regular APR with all charges and interest calculated into one percentage.
Now that interest rates have been explained to a certain degree, there is the loan itself to consider. When someone is trying to obtain a bad credit secured loan using their vehicle as the collateral, the most obvious factor in calculating the maximum amount that can be loaned is the condition and value of the vehicle. A newer vehicle with fewer miles on it is worth more than the family sedan that has been passed down among kin for the last 10 years. This form of UK secured loan can range from a few hundreds to tens of thousands of pounds; however the value of the car is not the only factor that is considered.
The value of a bad credit secured loan that uses a vehicle as collateral also takes the ability to repay the loan into consideration. Proof of a regular source of income is needed in order to secure the loan. This can be in the form of pay slips or bank statements that show that there is a constant flow of income. If neither of these documents are available, some lenders might go so far as to contact an employer to get details about how often the individual works and what they are paid. This is factored into the amount of the loan, as well as how much the weekly payments will be.
There is the issue of ownership of the car that is a major part of being eligible for a bad credit secured loan. Potential borrowers have to either own their car completely or have it nearly paid off from any financing companies that may have helped to buy the car. In either case, only the person who has their name on the title can apply for the loan and receive the money for it once it has been approved. This is in part, is due to the fact that the registration filed with the government has to show when transactions like this occur. This can only be changed by the person who owns the car.
