Are Personal Secured Loans for Bad Credit Possible?

Are you looking for personal secured loans for bad credit?

Well, having bad credit limits your financing options quite a bit since traditional banks always refuse to consider your application. But don’t worry; you can get a bad credit personal loan with ease through our trusted lenders.

Whether you’re financing a car, a trip, or sudden medical bills, you can use these loans to pay your expenses without worrying about approval. 

So how do personal loans with bad credit work? And should you consider applying for one? Continue reading to find out.

What this article covers:

• What Are Secured Loans?
• Is It Possible to Apply for Secured Personal Loans With Bad Credit?
• Can You Apply for a Secured Loan Online?
• How Can I Get a Secured Loan with Bad Credit?
• What Are the Requirements for a Secured Personal Loan With Bad Credit History in Australia?
• What Are the Benefits of Secured Loans for People With Bad Credit?
• What Are the Downsides of Collateral Loans for Bad Credit?

What Are Secured Loans?

Secured loans are ones you take out against an asset you own, called collateral, as a guarantee you’ll repay the money. The assets can include vehicles, properties, jewellery, or any other valuables.

The downside is that the amount of money you borrow can’t exceed the value of the collateral you secure the loan against. This way, if you default on the payment for the secured loan, the collateral can be seized or repossessed to cover the loan amount.

Is It Possible to Apply for Secured Personal Loans With Bad Credit?

Yes, you can! Secured loans are seen as less risky by most lenders, and so, even people with bad credit history can get loans with security at better rates than unsecured loans. 

Of course, the lender has to practise responsible lending, which entails not approving loans the client will struggle to pay off. This means your income, financial responsibilities, and other factors are taken into consideration while assessing your application. 

Can You Apply for a Secured Loan Online?

You can apply for secured personal loans online with instant approval. This is great news because it takes the fuss out of the process, streamlining it to provide you with the best service possible.

Moving the application process from an office to your phone, tablet, or computer also takes human error out of the equation. You fill out the application, your information is processed, and you receive the offer in your inbox momentarily!

How Can I Get a Secured Loan with Bad Credit? 

The steps to getting this type of loan are similar to taking out other loans. 

All you have to do is fill out an online application with the required information and wait. While you wait, we’ll be hard at work doing a fast credit check and figuring out the right interest rate and payment plan for your unique circumstances.

Soon after, you’ll receive the offer we came up with. It’ll be included in an online contract that’s accessed via an SMS verification code to ensure maximum security.

After you sign the contract, online approval for your personal loan will be sent, and the funds should reach your bank account within hours.

What Are the Requirements for a Secured Personal Loan With Bad Credit History in Australia?

The requirements for these loans depend on the lender you’re applying for. However, there are some baseline requirements, such as:

• Being an Australian citizen or having a Permanent Residence visa
• Being over 18 years old
• Having a stable income source for the past 90 days.

Some stipulations are put in place for clients receiving benefits or Centrelink income. These include having your weekly income above a certain threshold, as well as meeting affordability criteria for the loan you’re taking out.

What Are the Benefits of Secured Loans for People With Bad Credit?

If you have bad credit, then chances are you’ve been rejected for personal unsecured loans before. That’s because lenders rarely want to risk a default on loan with no collateral.

The advantage of a secured loan is the fast and easy approval because of the minimal risk to the lender. You also get the benefit of better loan terms, such as longer repayment periods and lower interest rates.

When you add loan security, you can access greater borrowing amounts depending on the lender you go to. Some lenders allow up to $10,000 in secured loans, and some even offer higher than that.

What Are the Downsides of Collateral Loans for Bad Credit?

Their biggest disadvantage is that if you default on repayment, your collateral asset will get repossessed. This isn’t ideal if you’re taking out the loan to pay for the collateral, which will leave you with nothing but a bad credit score on your file.

Another downside is that you can’t borrow more than the asset’s monetary value, which can put limitations on the amount you can access at any given point. That means if you want to borrow $5,000 and the asset is only worth $2,000, you’ll have to add another asset as collateral.

Lastly, the longer repayment period that makes the loan less urgent also makes it more expensive. The interest rates that you pay with each instalment can add up, making the loan more financially draining.

To Wrap Up

Taking out personal secured loans for bad credit sounds like it should be challenging. However, if you provide a valuable asset as security for the loan, your chances of approval become much higher.

They provide you with the funds you need right when you need them. The limitation on how much you can borrow is tied to the value of your asset. What’s more, you can pay your loan at a relaxed pace, with competitive interest rates and better terms.

If you need a loan, then you should check out OrangeLoans. Our friendly advisors are happy to help you decide what kind of loan is best for your financial situation!