What are Unsecured Personal Loans?
An Unsecured Personal Loan is a personal loan whereby no security is required. The loan itself is not based on any of the customer’s assets and thus not secured against a customer’s home/any other property.
Like most loans the rate charged tends to be based on a customer’s credit history. The better a customer’s credit the lower the rate charged tends to be. Unsecured Personal Loans for bad credit are widely available. The worse a customer’s credit history the higher the rate charged tends to be.
An unsecured personal loan is normally charged at a fixed rate meaning that a customer’s repayments stay the same throughout the term of the loan. The benefits of a fixed rates is so that a customer can match the amount they wish to borrow against how much they can afford to repay. As the payments stay the same a customer can then budget their outgoings each month.
If a lender’s rate is in fact variable (meaning that it can increase or decrease during the loan term) then this must be disclosed prior to a customer signing their agreement.
Loans range from £500 to £25,000 and can be used for virtually any purpose.
There are several other types of unsecured loans, including:
