Bad Credit Secured Loans Instant Decision – Is It Possible?

Is it possible to get a secured loan approved instantly? What about getting a secured loan approved instantly when you have bad credit? I delve into the topic and answer these questions below – you’ll probably be surprised by the answers.

How does my credit score affect me?

Your credit rating is a three-digit number that lets lenders know how much of a risk you are, and it gives them an indication of whether or not to lend you money. Your score is generated by credit reference agencies (CRAs) using your credit report, which is basically your financial history information.

If you have a bad score, you may find it challenging to get approved for credit. Even if you are approved, your credit score may affect how you are offered.

Three of the main CRAs in the UK are Equifax, TransUnion, and Experian. Each CRA has its own way of calculating scores, which means your credit score can vary. If you are curious about your score, you can check it online. It is free to check and won’t affect your credit rating.

What are secured loans?

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This means the secured loan provider has a right to force the sale of the property to recover the money owed if you don’t pay. This is known as foreclosure. The lender won’t do this if you miss a single payment, but if you keep missing payments or refuse to repay, the lender may choose foreclosure.  

The pros and cons of secured loans

The benefits of using a secured loan over a loan that doesn’t require an asset to be used as collateral (unsecured loans) are:

1. You can usually borrow more significant amounts of credit with a secured loan
2. You can usually find lower interest rates on a secured loan
3. You may be approved for a secured loan with bad credit

A secured loan offers these benefits because securing the loan with the asset reduces the risk to the lender. The lender knows it can get back the money if you don’t pay, so they can offer these things. However, you can still be rejected for a secured loan and may not be offered the terms you expect.

The disadvantages of using a secured loan are:

1. Your asset is at risk of foreclosure – you could lose your home!
2. They take longer to approve because appraisals may be needed
3. There may be more fees and charges compared to unsecured loans

The implications of missing payments

Missing multiple loan payments can have a negative impact on your credit score. In turn, a poor credit score can make you appear riskier to lenders, affecting whether you are approved for loans. Even if you are, a bad rating can impact the amount of credit the lender offers you. Moreover, continuously missing payments can lead to foreclosure.

Understanding foreclosure in the UK

As mentioned earlier, foreclosure can occur if a borrower continuously fails to make mortgage payments towards their property. A lender should contact the borrower before taking legal action, but if an agreement plan is not drawn up, they can begin court action for foreclosure.

If this occurs, you should receive paperwork from the court before attending a possession hearing. The court will decide on the lender’s repossession action at this hearing. This entire process can take months.

Is it easier to get a secured loan with bad credit?

It’s considered somewhat easier to get approved for a secured loan with bad credit than an unsecured loan with bad credit.

However, there are no guarantees you’ll get approved with bad credit. It will depend on your exact circumstances and individual lender criteria. 

The reason that getting approved for a secured loan with bad credit can be easier than getting approved for an unsecured loan with bad credit all comes down to lender risk. The loan provider will not take as big of a risk when lending to someone with a poor credit history because the loan is secured with an asset that can be forcibly sold.

Comparing interest rates

Regarding interest rates between secured and unsecured loans, the latter often have higher rates. Unsecured loans can be easier to obtain because the lender risk is lower due to the lack of collateral. Therefore, interest rates for secured loans are often lower. Your credit rating can also impact the rates you’re offered.

Can I get a secured loan against my house with bad credit?

Yes, getting a secured loan against a property or property equity with bad credit is possible. However, there are no guarantees.

Some lenders may not provide secured loans to people when they have a bad credit rating, or they may offer them at a higher rate of interest. 

You’ll need to shop around to find lenders willing to lend to people with bad credit. A finance broker can help you do this.

How quickly can I get a secured loan?

Secured loans usually take a couple of weeks to get approved. This is because more documentation checks are required when a lender approves a secured loan, and the lender may need to re-value the asset, such as completing a property appraisal.

Bad credit secured loans instant decision – possible?

Although most secured loans take weeks to be approved, there is still a way for people with bad credit to get a secured loan with an instant decision. They can do this by applying for a pawnbroker loan.

So, what is a pawnbroker loan? It’s a loan from a pawnbroker shop where the shop keeps hold of the asset until the loan is repaid. For example, you might need a loan of £500 and take a necklace worth £1,000 to the store.

The pawnbroker staff will value the necklace to ensure it’s genuine, provide you with £500 cash and get you to sign a loan agreement that commits you to weekly or monthly interest payments. If you make all the repayments, the necklace will be returned to you.

However, if you fail to repay the £500 loan, the pawnbroker store will sell the necklace to recover the money owed. Pawnbroker loans are usually the only way to get a secured loan instantly, and they’re usually available to people with a poor credit rating.

What loan can I get instantly?

Other than a pawnbroker secured loan, the only other loans you can usually get quickly are unsecured loans. 

Because the lender doesn’t need to check as many documents and doesn’t have to complete an appraisal on an asset, you can usually get an unsecured loan the same day with the money sent directly to your bank account. 

But, can you get unsecured loans with bad credit?

Some unsecured loan lenders will still approve loans for people with bad credit. However, the amount you can borrow could be restricted and less than someone with good credit can borrow. Moreover, the interest rate offered could be higher when you have bad credit.

Tips for improving bad credit

Bad credit can have a negative impact on how much you can borrow from lenders. From my experience, individuals can improve their credit scores by being punctual with payments and clearing outstanding debt. Additionally, you can check your credit report for errors.

Secured loans for bad credit, instant decision (Quick recap)

Secured loans are still possible for people with an unsatisfactory credit score and credit history. You generally have a better chance of getting approved for a secured loan with bad credit than an unsecured loan.

However, secured loan application and approval processes can take weeks, making it rare to find a secured loan for bad credit with an instant decision. Yet, a pawnbroker loan may be the answer.

These loans can usually be approved instantly by taking the asset into the pawnbroker loan store.