Being in bad credit is mostly situational – more often than not, it does not show a lack of planning on your part. It reflects more upon the situation you are in – you may have suddenly lost your job and are not able to pay certain dues you were comfortably paying or you may have suddenly required a big capital to steady your business and the returns would not start coming in the next six months. In many cases, the financial base of the person in bad credit is strong and she may have a property to support such a claim.

If you are stuck up in such a financial mess, your home or property or anything such which you do not wish to liquidate just now but you had acquired in your better days would prove to be your most valuable asset. You may go in for a bad credit secured personal loan in this scenario and it would certainly bail you out of your current state.

You might never have imagined that the equity trapped in your home or property which you thought to be a relatively immobile asset can help you out in such an active manner in a time of need. But the fact today is that lenders are ready to give any amount of money at relatively easier rates of interest if they have a collateral to comfort them and hedge their risk in investment. Such loans which are supported by a collateral which holds value for the lender are known as secured loans. The lender is comfortable since he is aware that if need be so, the property or bond or home can be liquidated and the amount in question be recovered – so he is ready to invest in a loan to you at a relatively cheaper rate of interest.

If you are nearly certain that your financial health would pick up and you would be able to repay the amount to loaned, to go for a secured personal loan is the best option. Secured personal loans are acquired against a collateral and the amount that can be loaned under this context is any amount up to the equity in the collateral under question. In cases of homes, it is determined by the market valuation of the property as against the amount of mortgage that remains to be paid.

You must be aware that secured personal loans are easy to obtain and at lower rates. So, you should shop for the best rates and only then go ahead with it. Under no circumstance, should you allow the lender to take advantage of the bad debt situation you are in and charge a higher rate of interest – your situation notwithstanding, the collateral is hedging all the risk for the lender. These loans are raised for amounts up to £70,000 or more and can be obtained at rates of interest as low as 8-10%. The exact rate would slightly depend upon things like your past credit history and the repayment period in question. Such loans can be obtained for a period up to 20 years.

You must very carefully consider your repayment plan since the most valuable asset you have is being placed as a collateral and you stand a risk of losing it if your repayments are not on time. Also, you must carefully inquire about the lender and the time in which your money would reach your account after formalities. All terms and conditions must also be well perused since you can not risk anything and repent later.

To summarize, it is easy for UK residents to obtain a bad debt secured personal loan to bail you out of an unfortunate situation. Such loans are given under the collateral of a property or a house or any other financial guarantee. The loan, since it is secured, can be obtained at a significantly lower rate of interest than your could have bargained for otherwise. This option should be very carefully explored and made use of if you are in a financial tight corner today and you have a property with equity locked in it – it can be of a very active use to you.