In today’s UK financial market, subprime loans not only occurs with mortgages but it has been extended towards the auto loan sector. This loan is provided to those borrowers who have bad credit due to various reasons. Subprime lending is also known as second charge lending. As the name suggests, this loan is extended to those borrowers who already had a loan but also want another loan. In this loan the initial charge stays with the first charge holder of the collateral and the second charge with the subprime auto loan lender. If the borrower fails to repay the loan amount, the second charge lender neither can claim the amount nor can he move the court against the borrower as he has only the second charge over the vehicle. The rate of interest is very high in this loan as it is risky for the lender. The loan amount depends on the borrower’s credit history and repayment ability. As it is a secured loan the loan amount and repayment tenure are both high. The loan amount can be around 10,000 and the repayment tenure around 10 †15 years. Apart from obtaining the credit rating from different credit agencies like Equifax, Trans union, Experian, etc. a borrower should be at least 18 years of age at the time of availing this loan. He should also have a permanent employment with a minimum of 1,000 as monthly salary and a valid bank account. It is very important to find the right lender as there are many dishonest lenders in the market who can enhance the agony and pain of a bad credit borrower. Secured car loans do not need any prepayments and penalties, so if any lender asks for it, it is better to avoid such a lender. One can easily search the internet for the best lender and compare the quotes provided for this purpose and then decide the lender.
Please Rate this Article 5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
