Unsecured Loans

An unsecured personal loan can offer you.....

• Competitive interest rates
• Homeowners and tenants can apply
• Fast decision in under 1 hour
• Quick and easy to apply - simple 1 minute application form
• Terms available from 1 to 10 years
• Unsecured Loans from £1,000 to £15,000
• Fast and friendly service
• Unsecured bad credit loans no problem
• No upfront fees

The Difference Between Unsecured & Secured Loans

Unsecured Loans

An unsecured loan is one of the more straight forward forms of borrowing to undertake.

Because the loan is unsecured it means that the loan is relatively risk free as you are not required to put up any collateral or security such as property to obtain the loan. 

Because of this, the lending criteria is usually quite strict.  The lender will carry out a credit check, and will take your residential and employment history into consideration in order to establish whether or not you are a good risk, i.e. you are likely to make all the repayments.

If you have a history of missed payments, arrears, ccj’s or any other type of credit misdemeanour, the lender may take a dim view of this and reject your application, especially if you are not a homeowner.  Lenders tend to treat homeowners as a less risky applicant as it is not as likely that they will abscond.

It may be that although you have some bad credit history that it is only minor or was quite some time in the past.  If this is the case, then you may be offered a higher rate of interest.

Lenders now have to advertise unsecured loans with a ‘representative rate’.  This is the interest rate that is offered to 51% of applicants.  This is not necessarily the headline rate and the rate you will be offered will depend upon your credit score and also the amount that you wish to borrow.
Unsecured loans are usually available for loan sizes up to £15,000 but if you have a very clean credit history and are a homeowner you may get a loan advance up to £25,000.  The usual term of an unsecured loan is from 2 to 7 years depending on the loan size, and also the lender.

It must be pointed out that some homeowners that have taken out an unsecured loan and then defaulted on the loan have found that their lender has applied to a court to turn the unsecured loan into a secured loan.  So bear in mind that although the loan is unsecured, if you are a homeowner and default on the loan there may be consequences for you.

Secured Loans

As the name suggest, a secured loan is a loan whereby some form of collateral is put up as security against the loan.  What this means is that should you default on the loan, the lender may exercise his right to reclaim the money that you owe from the security provided.

In most cases, secured loans are secured against property, although there are instances where a loan can be secured against a car, or other items of value.

As the security involved is property, secured loans are generally only available to homeowners.  With a secured loan, there is less risk to the lender and therefore larger sums of money can be lent over longer terms, and within certain limits, to people that may have some bad credit history.  The lender is more comfortable with the arrangement because should the borrower default, then the lender can get some or all of his money back from the property.

Secured loans are often available up to £100,000 and can run for up to 25 years.  The amount that you can borrow is determined by the equity that you have in your property.

Secured loan lenders still use the traditional method of advertising interest rates using the Annual Percentage Rate (APR).  This is the rate offered to 66% of applicants.  Again, this may not be the headline rate and the rate that you will be offered will depend on the amount that you wish to borrow, the term of the loan and your credit score.

Summing Up

Unsecured loans are fine for anyone that has a clean credit history and is looking to borrow up to £15,000, or in exceptional circumstances £25,000, and wishes to take the loan out over a term of between 2 and 7 years.

Secured loans are generally only available to homeowners.  Loan sizes of up to £75,000 are available, although some lenders do offer loans up to £100,000 but only in certain circumstances.  Loan terms of up to 25 years may be arranged.  Secured loans lenders are more flexible with applicants that have a bad credit history.

Loans from Loan Arrangers

To apply for a loan all you have to do is complete the short form by clicking the link above, we will have an answer for you in less than 30 minutes with a no obligation loan quote!

If you are a homeowner and are struggling to arrange an unsecured loans because of bad credit you might want to try applying for one of our secured loans, because the loan is secured the lender is more likely to agree to it.