Poor Credit Loans Will Help you in Adverse Situations

By: Anton Gabriel

It is not a very novel thing that you see a borrower with a poor credit history. In fact such a thing is pretty much common now. In such situations, the borrower in need of money does not know who to rely on. The perfect answer to this question is poor credit loans which the borrower can take up to remove his financial problems.

Poor credit can be created for the borrower intentionally or accidentally. The causes of poor credit history are arrears, defaults, CCJs, or missed repayments etc. All these factors cause a lowering in the credit score of the borrower. If the score of the borrower goes below 580 in the FICO credit report, then the borrower is said to have a poor credit history. It is in such a financial condition that the borrower can take up poor credit loans to fulfill his financial requirements. Other organizations like Transunion, Experian etc also make credit reports to judge the credit history of the borrower.

The borrower can take up in two forms. The first is the secured form of poor credit loans. For this the borrower has to pledge any high equity asset with the lender and can take up an amount in the range of ?5000-?75000. This money has to be repaid by the borrower in a term of 5-25 years to the lender. Another way is the unsecured form of poor credit loans. The borrower is not required to pledge any asset for these loans. The amount allowed is in the range of ?1000-?25000 for a term of 6 months to 10 years.

The rate of interest for unsecured loans is higher than that of the secured poor credit loans. This is due to the risk factor that is involved with the unsecured poor credit loans. To cover the risk, a higher rate of interest is charged. But this rate can be lowered by proper researching for a low rate deal.

Poor credit loans provide another chance to borrowers so that they can fulfill their financial needs and this may also help in improving their credit history.

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