A Bad Credit loan is designed to take into account the past credit track records of the applicants and doesn’t impose crippling interest rates. The loan is provided against the security of your prime asset - your home. Thus you risk your home in case of failure of repayment of monthly loans.

According to a research, at least 50 per cent of the homeowners have faced some or the other form of credit problem in the past. Mostly the poor financial management is blamed for such problems along with a poor credit record - divorce, redundancy or bereavement. These factors are labelled as a ‘poor risk’ by the lenders.

Most of the lenders reject any application with a negative credit check score. However, there are many companies that are prepared to give bad credit risk a break. A default or few minor County Court Judgements doesn’t penalise you from applying for loans. A reliable payment record in the early phases of the loan term lets most of the lenders relax and allow a secured loan at a lower rate.

The amount borrowed varies from lenders to lenders and depends upon factors like your credit history, collateral, your capacity to repay and your employment history. It also depends on the loan size and the repayment period.

Default on repayments on credit cards, loans and falling into mortgage arrears leads people to bad credit. You can’t hide the bad credit from the company you’re planning to take loan from. A lender always checks your credit history from the credit checking company. Thus credit problems can make it tough for you to get financial help from the mainstream lenders.