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Secured loans for bad credit

Learn your loan options and act wisely

With the world economy in the shape that it’s in today, it is not uncommon to hear of people who have bad or zero credit ratings. Often this label can hinder the person in getting the financial help that they need in order for them to start making better financial decisions.

What is a secured loan?

Banks and other loan organizations may see bad credit as a big red flag when it comes to loan applications and this is the first thing that is assessed during the loan application procedure. People with bad credit history are deterred from applying for a much needed loan at the bank or similar places, as they know that their bad credit history will negatively impact on the loan approval. Banks who in the rare occasion approve loans to bad credit holders, hike up the interest rates, as they see a very high calculated risk in approving this type of loan, without any collateral. This becomes a circle of defeat as the high interest rates can have a major impact on the borrowers ability to make the repayments.

Security on loans & loan agreements

In contrast, secured loans are very helpful in this situation, as they allow the borrower to pledge a valuable asset as collateral for their loan. This nullifies the importance of using their credit record as a yardstick to measure loan repayment defaults. The loan is approved according to the asset and its value, as these serve as collateral to the money. This ultimately lowers the risk taken by the lender in approving the loan, as they have an asset of value which can be repossessed in the case of prepayment defaults. Often, like in the case of a car title loan, which is one type of secured loan, the repayments are easier to follow through with.

Call us now to further discuss the loan options that are available for you – (408) 840-4380
Call now to be transferred to Montana Capital

5 Star Loans, Inc., California Finance Lender #603J988, acts as the broker for the loans, and is not the direct lender. Loans made pursuant to California Finance Lenders Law License # 603F508 Montana Capital (Simple Cash Loans Inc., DBA)