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As the credit crunch hits harder and harder the lenders are getting increasingly wary of loan applications with ANY form of bad credit history.

Historically there were lots of specialist lenders willing to take on applicants with bad credit but given that part of the whole credit crunch fiasco is based on bad credit loan payments not being honoured it appears they have learned from their very costly mistakes.

Now those people looking to take out bad credit loans are subject to even tighter lending criteria. Applications must go through credit checks. The Loan To Value has been dropping from 100% down to 90%, down to 80% and in some cases it is as low as 65%. This of course means that those looking for secured loans on their properties are struggling to find a loan.

Plus the interest rates for bad credit applications have also seen a rise. Thus making it even less attractive for potential applicants. It’s pretty much a vicious circle and the only loser here is the applicant struggling to find a loan, even if they can genuinely afford the repayments.

And even if you can’t find bad credit secured loans then the other options open to you in the past were Unsecured Loans but these too are subject to even tighter lending criteria. With no security for the loan the lenders are lowering the maximum loan amount in order to protect their interests. Plus, most of the lenders are only borrowing the money themselves anyway so there is a trickle down effect and the person at the end of the line will ultimately suffer the most.

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