When your credit score isn’t at its best, getting approved for a loan might seem impossible. But there’s good news: secured loans for bad credit offer a solid way to borrow money when you need it the most. These types of loans use your assets like a home or car as collateral, giving lenders confidence to approve your application.
Unlike unsecured loans, where approval heavily depends on your credit history, secured loans offer a second chance to borrowers who’ve faced financial setbacks. If you’re a starter in the world of credit repair or just need fast funding, secured loans can help without the long wait.
In this guide, we explore the top 5 secured loans for bad credit available right now. Each option is designed for speed, simplicity, and real-life results. Whether you’re trying to fix your credit or just need cash quickly, these loan options are worth your attention.
What Are Secured Loans for Bad Credit?
A secured loans for bad credit is a loan backed by an asset you own. This could be your house, car, or any property that holds value. Because there’s less risk for lenders, they’re more willing to offer competitive interest rates and approve applications quickly even if your credit score is low.
These loans work well for people who:
- Have a bad or thin credit history
- Need access to large sums of money
- Want lower interest rates
- Are confident they can repay the loan on time
However, since your asset acts as collateral, failure to repay the loan can lead to repossession. That’s why these loans should be handled with care.
Key Benefits of 5 Secured Loans for Bad Credit
1. Easier Approval Because you’re offering collateral, banks and lenders don’t worry as much about your credit score. This gives you a better shot at approval.
2. Lower Interest Rates Compared to unsecured loans, secured loans usually have lower interest rates. This makes repayments more manageable.
3. Higher Borrowing Limits Lenders often allow you to borrow more when there’s an asset backing the loan. That’s useful if you need to fund major expenses.
4. Flexible Terms You can often choose how long you want to repay the loan usually between 3 to 25 years.
5. Credit Score Improvement Repaying on time can gradually boost your credit score, opening up even more financial opportunities later on.
Risks You Should Know
No loan is without risk. Here’s what to watch out for with secured loans for bad credit:
1. Asset Loss Fail to repay and you could lose your home, car, or other valuable asset.
2. Long-Term Debt Longer repayment terms can feel easier month-to-month, but you might pay more interest in the long run.
3. Added Fees Some lenders charge for application processing, property valuation, or early repayment. Always read the fine print.
4. Variable Rates Some secured loans have variable rates that can go up. This means your monthly payments could increase unexpectedly.
Top 5 Secured Loans for Bad Credit
Here are five secured loans for bad credit options ideal for people starting their credit rebuild journey:
1. Evolution Money
- Loan Range: £5,000 to £50,000
- Terms: 1 to 20 years
- Perks: No early repayment fee; accepts CCJs and missed payments
Evolution Money caters specifically to people with bad credit. They make decisions based on your real-life situation, not just your credit score.
2. Central Trust
- Loan Range: £10,000 to £250,000
- Terms: 3 to 25 years
- Perks: Flexible options for homeowners; considers multiple income sources
Central Trust works with a variety of income types, which is helpful if you’re self-employed or work on contract.
3. Shawbrook Bank
- Loan Range: £5,000 to £500,000
- Terms: 3 to 25 years
- Perks: Offers fixed and variable rate choices
Shawbrook Bank focuses on affordability checks rather than just credit scores, giving you a fairer assessment.
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4. Together Money
- Loan Range: £10,000 to £250,000
- Terms: 3 to 30 years
- Perks: Caters to people with non-standard income; very flexible
If you have income from multiple sources or a complex financial background, Together Money could be a fit.
5. United Trust Bank
- Loan Range: £10,000 to £500,000
- Terms: 5 to 30 years
- Perks: High-value loans with personalised lending advice
United Trust Bank supports larger loan requests and offers personal consultations to tailor the loan to your needs.
How to Apply in 5 Simple Steps
- Know Your Numbers: Check your credit score and determine your budget.
- Pick Your Collateral: Decide what asset you’ll use to secure the loan.
- Compare Offers: Don’t just accept the first offer. Compare interest rates, terms, and fees.
- Submit an Application: Provide proof of income, ID, and property details.
- Get Approved: Once approved, carefully review the loan agreement before signing.
Tips to Keep in Mind
- Always borrow only what you need.
- Avoid variable interest rates unless you have room in your budget.
- Set up a direct debit for repayments.
- Check for early repayment charges before committing.
Alternatives Worth Exploring
Secured loans aren’t your only option. Depending on your situation, you might consider:
- Guarantor Loans: Someone else agrees to repay if you can’t.
- Credit Union Loans: Often have lower rates and community-focused policies.
- Bad Credit Credit Cards: A way to rebuild credit with responsible use.
Table: Quick Comparison
| Lender | Loan Range | Term | Ideal For |
| Evolution Money | £5,000-£50,000 | 1-20 years | CCJs and defaults |
| Central Trust | £10,000-£250,000 | 3-25 years | Contract & self-employed |
| Shawbrook Bank | £5,000-£500,000 | 3-25 years | Flexible rates |
| Together Money | £10,000-£250,000 | 3-30 years | Non-standard income |
| United Trust Bank | £10,000-£500,000 | 5-30 years | High-value personalised loans |
Final Words
Choosing a secured loans for bad credit doesn’t have to be overwhelming. If you’re a starter in your credit journey, the options covered here can provide both relief and opportunity. Each lender brings something unique, whether it’s flexibility, high loan values, or support for complicated financial histories.
The most important step is to act soon but wisely. The sooner you begin, the faster you’ll unlock funds, cover urgent needs, or start mending your credit score. Take your time to compare lenders, understand the terms, and plan repayments carefully. That’s how you secure not just a loan but your financial future.
FAQs
1. Can I get a secured loans with very poor credit?
Yes. Many lenders approve secured loans based on collateral rather than just credit scores. You have better chances if you own a valuable asset.
2. What happens if I miss a payment on a secured loan?
Missing payments can lead to late fees, credit damage, or even repossession of the asset. Always notify your lender early if you’re struggling.
3. Are secured loans for bad credit safe?
They are safe if you understand the risks and repay on time. Read the terms carefully and avoid overborrowing.
4. How long does it take to get approved?
Approval can take anywhere from a day to a week, depending on the lender, your documents, and collateral verification.
5. Can I pay off a secured loans early?
Yes, but some lenders charge early repayment fees. Always check the loan terms before signing the agreement.
