Bad Credit Loans For Homeowners

Bad Credit Loans For Homeowners

Once you buy a property and are approved for a mortgage, your credit score and credit history is usually at an all time high.

You qualified and were approved for what many of us will be the largest loan we will ever need, a mortgage.

Properties today can cost well over £100,000, even in some of the less expensive parts of the country. If you want to live down south, or in London, you can be looking at hundreds of thousands of pounds to buy a property, even a small flat.

So being approved and getting a mortgage requires good credit, affordability, and also a good deposit.

Once you are approved for your mortgage and move into your new home, all you need to is to pay the monthly mortgage payments and all is well.

However, sometimes life has a way of making things difficult.

There we are cruising along with our jobs, and life, and nice house, and we may face redundancy, or a health issue, or any other of a number of reasons that we may find ourselves financially struggling to pay the bills.

If you miss a mortgage payment, or get in arrears with your mortgage, getting caught up on the payment is a huge challenge, and the damage it can do to your credit score is just as huge.

Even if someone does face a financial challenge, and maintains their mortgage payment, they may still struggle with other accounts and bills; which can also affect their credit history and credit score.

Then later, when you are back on your financial feet and may need a loan, it can prove difficult to be approved as now you have a low credit score and a bad credit history.

What loans are available to homeowners with bad credit?

There are a few options available:

Payday Loans

Payday Loans:

Payday loan are short-term small loans with a high interest rate/APR. These loans are for people with bad credit, and who require a small loan of a few hundred pounds, and can repay the loan on their next pay period.

These loans are based on affordability, and the fact the borrower has a job and a bank account.

The downsides can be they are small loans for a very short period of time (30 days), and carry with them high interest rates of 1500% to over 2000%.


Home Equity Loans

Home Equity Loans:

These are loans for homeowners who may have equity in their property. The loan is secured against the property, and the lender will only lend a certain amount against the equity in the property.

For example, if a person owns a house worth £150,000, and only owes £120,000, they have £30,000 equity. A lender may only lend an amount that is a portion of that equity in the form of a loan, and again the loan is secured by the property.

Should the homeowner struggle to make the repayments, their home could be at risk.


Home Equity Loans

Guarantor Loans:

Guarantor loan are approved based on affordability and also the fact there is someone guaranteeing the loan.

The loans are not secured by the property, so there is no risk to the property.

The loans can be for longer terms than a payday loan, and have much lower interest rates, so payments can be more affordable.

Benefits of a Buddy Loan for homeowners

  • Bad credit not a problem
  • Easy and quick online application
  • Quick approval and money in your account usually within 24 hours
  • The loan is not secured by the property
  • Loan can be paid back over 60 months (5 years)
  • Competitive interest rate
  • The loan can be for any reason, debt consolidation, home improvements, buy a car, repairs, etc.

If you have a good buddy, you can be approved for a Buddy Loan!

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Representative Example

Borrow
£3,250

Term
36 months

Repaying
£158.57 p/m

Total Repayable
£5,714.67

Interest Rate
41.16% (fixed)


Representative 49.9% APR.

Terms and Conditions apply. Suitable Guarantor required. All loans are subject to status and affordability checks prior to approval. All applicants must be 18 or over.

Minimum period for repayment: 12 months | Maximum period for repayment: 60 months | Minimum APR 49.8% | Maximum APR 49.9%
Representative example: Amount of credit £3,250 for 36 months. Interest (fixed at 41.16%): £2,464.57. Total amount payable of £5,714.67. Representative 49.9% APR (Variable). 36 repayments of: £158.57.