Credit history is a vital factor in deciding loan availability. Credit history is the record about the past credit behaviors of the borrower. How you repay, how much you owe and up to what extent you are regular in repayments decide your credit rating. When a borrower repays the borrowed amount along with interest within the assigned time period, his credit rating remains fair. Irregularity in repayment leads to a decline in the credit rating. There are other factors like CCJs, arrears and bankruptcy which adversely affect the credit rating. Unemployment also has adverse effect on credit score. When a professional loses his job, he finds it hard to maintain regularity in repayment. Same is the case of students after they complete their studies. As job market is more competitive now, they are unable to start repaying immediately after the course is completed.



Bad credit rating means the borrower’s creditworthiness is below satisfactory level. As the past behavior of the borrower is susceptible, the lenders are little bit reluctant to offer loan options. However, there is a sea change in this attitude of the lenders due to increased competition and the opportunities prevalent in the untapped bad credit loan market.

As out of every 10 borrowers in the UK, six are suffering from bad credit problems, there is no way that the lenders can alienate them. Now, residential property security is no longer a mandatory clause before granting loan plans to bad credit borrowers. Bad credit unsecured loans are offered by lenders and financial institutions without any residential property security. These loans charge a higher rate of interest because of the bad credit rating of the borrower and also due to the absence of residential property security.

Bad credit loans are available for all purposes and the maximum amount the borrower can have when the loan plan is unsecured is 25,000 pounds. The borrower has to repay this amount within ten years and the lenders expect that he will be regular in repayment this time. If the repayment is done in the assigned period, the borrower is benefited manifold. The credit rating improves after the repayment and the borrower gets many lucrative loan options.

Bad credit unsecured loans have become more borrower friendly with the advent of E-lending. Now, the loans can be applied and processed online. Hence, the required time for loan sanction has reduced considerably and the borrower gets loan easily.