The past few years have been difficult for the loan industry, as well as borrowers who require a new loan for whatever purpose. But for potential borrows who have anything less than a perfect credit rating, it can sometimes seem almost impossible to get the loan they need.

One loan broker, the Loans Warehouse, has pointed out that throughout the difficulties faced by the loan industry since the credit crunch, one sector of the market has continued to offer loans on bad credit loan basis, that is the secured loan sector.

Loans Warehouse have pointed out that loan companies such as Prestige and Blemain have continued to offer bad credit loans to customers with a less than perfect credit history, throughout the recession and recent financial crisis in the UK.

Whilst high street lenders have focused on higher loan to value levels for prime loan customers with perfect credit ratings, they have neglected those borrowers with some level of adverse credit in their history, even if this is very slight, such a historical loan arrears.

Recently, the secured loans market has seen the introduction of new lenders such as First European, Spring Finance and Equifinance, alongside the more established loan companies, all of whom are prepared to offer bad credit loans to customers.

Although bad credit loans are still not as easy to obtain as they used to be, borrowers can still get a loan even with home owner loan arrears, County Court Judgements, loan defaults and high levels of unsecured loans.

Matt Tristram of Loans Warehouse said “In the past few years we have completed over a thousand loans for customers with a less than perfect credit history. It’s a reality of the current climate that people, even those with poor credit, need to refinance and restructure their loans and borrowing.”

Over the course of the past few years, it has become increasingly more difficult for someone to obtain the loan they require, whether it is for a relatively small unsecured loan, or a secured loan for large purchases or projects.

But one loan broker company has just announced the addition of a new provider or secured loans to its panel of lenders, with a new product for the secured loans market.

The secured loan broker, Loans Warehouse, have said that they are now offering a new loan product to customers from the provider Equifinance, who are offering a market leading secured loan deal for borrowers, even those with a poor credit history.

The new secured loan deal is now available through Loans Warehouse and offers secured loans of up to 75 per cent loan to value, even for those individuals with an impaired credit history, including County Court Judgements (CCJ’s), unlimited past arrears on home owner loans and mortgages and loan arrears on unsecured loans and credit cards.

The loan deal is available to any owner occupier, even on a semi commercial property and will ignore any previous loan defaults, CCJ’s and current arrears on unsecured loans and cards. The product is also open to self employed borrowers who are able to show adequate income for the loan.

The new loan product is only available through the services of a loan broker or financial adviser, therefore anyone looking for an adverse credit secured loan will need to seek professional advice on the matter.

Matt Tristram of Loans Warehouse said “The secured loans market has for some time offered clients with poor credit a way of borrowing money not available through re mortgaging but our new product from Equifinance offers something extra.”

Since the credit crunch it has become much harder for anyone to obtain the loan they require, but for those with adverse credit who need a bad credit loan, it can sometimes seem almost impossible.

Those borrowers who are seeking advice and want to get the best deal they can on a new loan, often use the services of a financial adviser or a loan broker, who has access to a much wider range of the loan market, including lenders and loan deals which may not be available to the public directly.

But new regulation which is being introduced within the loan industry, particularly for home owner loans under the Mortgage Market Review (MMR), cold make it more difficult for even loan brokers and advisers to find a suitable bad credit loan for their clients.

A new survey amongst loan brokers and advisers found that 53 per cent of them said that they did not place a single bad credit loan case with a lender over the course of last year, whilst a further 30 per cent said that they were able to only place around 25 per cent of bad credit loan cases.

12 per cent of loan brokers said that they were able to place 75 per cent of their adverse credit loan cases and only 3 per cent said they did not have a problem placing bad credit loans for clients.

One Independent Financial Adviser said “I’m surprised that more loan brokers aren’t having difficulty placing cases for people with imperfect credit records. It’s bad enough trying to get a loan approved for somebody who has got no adverse credit, let alone someone who has.”

“On the back of these results, I would be encouraged to think that there is hope for these types of borrowers. But I can’t imagine that the levels of adverse credit that we’re talking about here would be anything major like bankruptcies and countless CCJ’s”

With the UK suffering a bad year economically last year and the prospects of a second recession looming in the very near future, unemployment figures are increasing at an alarming rate, leaving many individuals in danger of falling behind with their personal loan and other debt repayments.

The unemployment rate in the UK has increased from 8.3 per cent to 8.4 per cent, which is the highest level since 1996, according to the Office of National Statistics (ONS).The total unemployment figure in the UK now stands at 2.685 million people, an increase of 18,000 over the course of the three months to November last year.

With personal debt levels on things like unsecured loans and credit cards at an all time high, many people who are currently unemployed, or face the prospect of losing their job, will be unable to manage their loan repayments on a regular basis, as many are already struggling to stay on top of their loan debts even with a full salary coming in.

Those people who took out some form of loan protection in the event of unemployment, could have their loan repayments covered for a limited period, but many borrowers have simply not bothered taking out this type of cover, either due to the recent bad press surrounding such policies, or on the grounds of keeping their loan costs as low as possible.

This is a particular problem for young people between the ages of 16 and 24, as almost a quarter of this group are unemployed, whilst this same group has some of the highest loan and credit card debt across all age groups, based on a percentage of earnings.

For those facing unemployment and problems with their personal loans and other debts, it is important to seek professional help and advice as soon as possible in order to try and avoid serious loan arrears and a bad credit rating.

With banks currently offering negligible levels of interest on savings accounts and becoming extremely reluctant to offer a personal loan to anyone, unless that person has a perfect credit rating and is prepared to pay a high premium for their loan, many people are turning to alternative solutions for their savings and taking out a loan.

There has been a particular growth in the number of credit unions recently, as well as the number of people using them to get a better return on their savings, as well as the option of a cheap loan and with the government relaxing the rules on this type of organisation, numbers are likely to grow even more over the course of the next twelve months or so.

However, this option may not be quite as safe as it seems, based on the number of recent failures of several credit unions within the past few months.

The Financial Service Compensation Scheme (FSCS) has just announced that it has had to bail out the members of the Hull East of theRiver credit union, following the news that it was declared in default yesterday (16th January).

The FSCS is expected to pay out a total of £94,000 to the scheme members as it believes that the organisation “is unable or likely to be unable to repay its members deposits.”

This is the second bail out of a credit union so far this year, following an earlier pay out this month of £206,000 for a similar scheme which fell into default. Over the course of last year there were a total of six credit unions which fell into default, requiring a pay out from the FSCS.

The FSCS protects investor’s funds up to the level of £85,000 in this type of scheme and for claims of under £1,000, the funds can be paid out in cash over the counter at a Post Office.