Unsecured loans are one of the more easier way of borrowing money, because the loan is unsecured it means that the loan is risk-free because you do NOT need to have any collateral such as your home secured against the loan as a form of security for the lender. With unsecured loans you are not at risk of losing your collateral, should you fail to keep up with repayments.

When you apply for an unsecured loan the lender will carry out a credit check on you to find out whether you can be trusted to keep up with repayments. A credit check will determine whether you have had any credit problems in the past such as Arrears, County Court Judgments (CCJs) or Bankruptcy. If you have had any credit problems in the past the lender may consider you a high risk and decline you credit, however the lender may offer an unsecured loan for bad credit, these work just as that of unsecured loans except the interest rate will be higher.

Types Of Unsecured Loan

Generally there are two types of unsecured loans you an choose from, either a fixed rate or variable rate unsecured loans.

Choosing a fixed rate loan means that the interest rate will be a fixed amount which means your monthly repayments will be the same each month making repayments more manageable. Variable rate loans interest rates change depending on the market and the Bank of Endlands base rate, this means that your monthly repayments can change from month to month meaning you will not always know how much you wil be paying each month. You should be careful when choosing variable rate loans because if the interest rates rise too much you may find it hard keeping on top of your repayments.

Who is eligible for An unsecured loan?

Unsecured loans are open to everyone whether you are a homeowner or tenant, whether you have good or bad credit, everyone will be considered for an unsecured loan. However you are more likely to be accepted if you have a good credit rating. Only those who have a good credit rating will be eligible for the headline interest rate.

Those with bad credit history are more likely to be accepted with a secured loan, this is because the lender has security should fail to keep up with your repayments.

What Purposes Can An unsecured loan Used For:

Generally unsecured loans allow to to borow anything upto £25,000 which can be repaid usually over a term of 5 to 7 years, depending on the lender. They can be used for almost any purpose including the following.

• Home improvements
• Buying a new car
• Small business funds
• Financial emergencies
• Debt consolidation
• Family Holidays
• Wedding funds etc

Payment Protection

Payment protection insurance is usually offered by most lenders, it is designed to take over your loan repayments should you be unable to keep up with them due to unemployemnt or sickness. However, this does come at an extra cost but can be very useful should you end up in the situation that you need it, it can also provide with peace of mind when you borrow large amounts.

Find The Ideal unsecured loan today

Now you know a little more about unsecured loans, why not let us help you find the best loan deal for you. Click here to go to our unsecured loans page and fill out our quick and easy loan form and get a call back from a loans specialist who will help you find the perfect loan deal for you.

 

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