Getting a loan when you are in need of cash can  be a long drawn out process at the best of times but if you are unfortunate enough to have a bad credit rating then things become even more difficult. High street banks generally turn their noses up at individuals who have bad credit ratings leaving you to go elsewhere in search of an unsecured loan.

Although its easy to get angry at the banks for their attitude its logical that they should only want give their money to people who they are sure can pay back what they owe. Having a bad credit rating is usually a sign that your money handling skills leave something to be desired so you are not going to be the safest bat for any financial institution.

To make up for the fact that you have a bad credit rating it is usually easier to take out a secured loan rather than the regular loans that you find available at your local bank. A secured loan is almost identical to an unsecured loan apart from one very important distinction. A secured loan requires you to put forward something that you own as a guarantee that you will be able to pay back the cash. If, for whatever reason, you fail to repay the loan then the lender has the right to take possession of whatever property you used to secure the loan.

Secured loans obviously give the lender a security that they wouldn't have usually given that if you loose your income or run out of cash and your loan runs into arrears then they are still assured to get their cash back in some way. Most fair lenders would still prefer you to give them the cash you owe to save them the hassle for taking your possessions and having to sell them at auction to clear your debt but at least they know the option is there.

The secured loan greatly reduces the risks for the lender and at the same time permits the borrower to receive loans on more favorable terms, including better interest rates and more suitable repayment periods.

So with this added security comes more leniency when it comes to lending money. If you really need a bad credit loan applying for a secured loan might be your only viable option.

Mortgage

The simplest form of secured loan which we are all aware of is the mortgage. The bank will give you the money you need to buy the house, although usually only a percentage of the houses total value and you will agree to pay back the money over the next 20 or 25 years. If you fail to meet your repayments on a regular basis the bank can step in and take your house off you, leaving them way to get their money back.

If you have paid off a portion of an existing mortgage you may be permitted to re mortgage your property, especially if the value if your property has risen since purchase. Loans on properties are renowned for having low interest rates compared to all other loans and that's why re mortgaging is so popular.

Log Book Loans

A Log Book Loan is a product which is popular in the UK and allows you to get a loan secured on your car. As long as your car doesn't have outstanding finance on it you should be able to get cash for about half the value of the vehicle. Log Book Loans UK are convenient as you can have access to the money in 24 hours but they carry very high interest rates and the lenders are renowned for being quick to act when you fall behind on repayments. Are willing to put your motor vehicle at risk to get the loan you want? Think about using Log Book Loans very carefully before yo take the plunge.

If you have a bad credit rating, need a loan, but have no property to secure a loan against then you might have to take drastic action by getting a payday loan or visiting the local pawnshop.

Both these options are less than ideal and should only be used in true financial emergencies. Payday loans carry high interest rates and can lead to a vicious circle where you get into more and more debt every month. With pawnshops you will often find that you lose the items that you pawn because you never gather the required money to get them back, so treat these places with the respect they deserve before using them.