A Unsecured Loan in brief

An Unsecured Loan works on the principle that the lender will give a loan to the borrower without any security. Also known as Personal Loans, Unsecured Loans are issued purely on the borrowers personal credit history and the lenders calculation that the borrower can repay the loan.

Unsecured Loans are not secured against your assets and are therefore present more of a risk to the lender. This means that lenders apply a stricter criteria before offering Unsecured Loans, so it is important that a good credit history and evidence of a sufficient regular income are available before the lender can make any offer of a loan.

Amounts for Unsecured Loans vary from £250 to £25000 and can be used for many reasons including debt consolidation. The term of an Unsecured Loan is typically between one and seven years. Personal circumstances such as your credit worthiness will influence the lender and determine what they are prepared to lend.

Monthly repayments vary depending on the amount borrowed, the term of the loan and the interest rate charged. Always compare two or three different providers to be sure that the loan you are offered is the most competitive.

Unsecured Loans are often more difficult to arrange because the lender has a reduced security. Borrowers with a poor credit history are less likely to achieve competitive Unsecured Loans and may wish to consider a Secured Loan as an alternative.