Bad credit loans, good deals: the clock is ticking

If you’re looking for a good deal on a bad credit loan then it’s time to act fast. The “credit crunch” is making many lenders tighten up their rules. If you’ve got bad credit, you might find looking for a loan harder in 2008.

Banks and building societies are cutting down on the amount they will lend in proportion to the value of a property. They are also pushing up their lending rates to borrowers who are seen to have a bad credit history, and in some cases are reducing the number of acceptable county court judgements. And some banks are even stopping giving out unsecured personal loans altogether.

Bad credit loans, the “credit crunch” and sub-prime lending
The amount of money banks lend to each other has dried up over recent months. Each bank is worrying about how much money the others have lent as bad credit loans in the USA, which is experiencing a heavy spate of defaults, non-payments and repossessions.

Most financial experts believe the credit problems to continue and possibly get tougher. Some believe the problems with bad credit loans in the US – the “subprime” problems reported in the media – could be repeated in Europe and the UK. And that means that, with bad credit loan options getting fewer by the day, anyone with a bad credit rating might want to act now to secure a loan before it gets too late.

Banks make bad credit loan decisions
There is an argument that the banks’ cash flow problems are the result of their own financial irresponsibility – and that by punishing people with bad credit loan histories they are in fact just passing the blame.

The public can usually smell a rat – and they did with the Northern Rock, stashing their money elsewhere when they felt the Rock wasn’t the dependable, financially responsible organisation it pretended.

And now the other banks and mortgage companies are falling over each other to pretend they’re not the ones who can’t be trusted with your cash. Jonathan Cornell, managing director of Hamptons Mortgages, told the Financial Times that, “Lenders are finding it harder and harder to securitise subprime mortgages, so they are trying to make their subprime books cleaner.”

Bad credit loans: time to act fast
The FT pointed out that some lenders would now only lend people they considered to have a bad credit history 75 per cent of the value of a property, while others were charging arrangement fees of up to £1,000 for loans of 90 to 100 per cent of the value of a property.

Another director of a mortgage company told the newspaper, “Lenders would prefer to focus on low LTV business because it is lower-risk.”

And with at least four lenders – Hanley Economic building society, Eskimo Loans (a group funded by Northern Rock), GE Money and Liverpool Victoria – taking their personal loan products off the market altogether, the options available are diminishing, even for people with the best credit histories.

For people looking for a bad credit loan, it is getting harder to find a good deal. But there are still loans available – for the time being, at least. It’s time to act fast.

Let Homebank give you bad credit loan help
If you are looking for a bad credit loan then let experts save you time and money by finding the right bad credit loan for you. Homebank has qualified mortgage consultants ready to advise you with all your loan, mortgage and insurance needs. For informative and insightful bad credit loan advice, call us to arrange a no-obligation appointment to suit you.

Homebank’s experienced consultants could find the ideal product for you. Call Homebank now, free, on 0800 052 3604.