There are many borrowers who have a bad credit history. You may acquire a bad credit score as a result of default, late payment, insolvency, etc. We have seen a huge expansion of the UK loan market. More and more Britons are now taking out loans. A loan can be used for a number of purposes. You can use it to improve your standard of living which you would not have been able to do otherwise.
Just as the loan market is expanding, the number of defaults and insolvencies is increasing too. According to the Department of Trade & Industry, personal insolvency cases have increased by 46% in 2005. There have been 60,102 individual insolvencies in the last one-year. The number of corporate bankruptcies has also increased. Corporate bankruptcies have increased by 14% in England and Wales in the third quarter in 2005. A default is not always intentional. You may default as a result of an accident or illness. If your company is downsizing, you may get laid off and find yourself in a situation in which you are unable to repay your loan.
Once you acquire a poor credit score, you will find it difficult to take out a fresh loan. The situation becomes even worse if you are not a homeowner. A homeowner can use his house as a security to obtain a bad credit secured loan [http://www.apply-4-loans.co.uk]. If you do not own a house, you will have to go for a bad credit unsecured loan. There are a few things that you should know before you take out such a loan. It carries a very high rate of interest since it is unsecured and is offered to a person with a bad credit history. Moreover, it does not allow you to take out a large amount.
The loan period of an unsecured loan ranges from a few days to a few years. It is shorter than the loan period of a secured loan. The rate of interest on an unsecured loan depends on the borrowers credit score and financial position.