This is a simple guide outlining the main differences between personal / unsecured loans and secured loans. It should not be taken as advice. Should you apply for a loan through this site, the loan broker who contacts you is legally qualified to advise you, and will be glad to answer any questions you have.
A personal loan (also called an unsecured loan) is a loan of up to £25,000 which can be repaid over a maximum period of 7 years. You must be a UK resident at least 18 years old and in some form of employment to apply for one.
The interest rate you will get is determined by the amount you borrow, your age, credit score, type of employment you are in, your income & whether you are a homeowner. The lenders main priority is that you will pay them back, so those people statistically most likely to repay them are given the best deal.
The ideal candidate for these better deals is someone aged between 25 and 60, earning over £20,000 from permanent full-time employment, with a good credit score and who owns a home. The further you are from these criteria, the higher your interest rate will be.
A secured loan is a loan of up to £100,000 which can be repaid over a maximum of 30 years. You must be a UK homeowner at least 18 years old and in some form of employment to apply for one. They are called secured loans because the lender secures the repayment of the loan onto your home. This means if you cannot afford to repay the money, the lender can sell your home to recoup their loss. You must be very careful if you want to borrow this way, and be certain you can afford the repayments.
The interest rate you will get is determined by the amount you borrow, your age, credit score, type of employment you are in & your income.
The maximum amount you can borrow is determined by the equity you have in your home. For example if your house is worth £200,000 and you have a £120,000 mortgage with no other secured loans on the property, then you have £80,000 equity. Depending on your circumstances you can borrow up to around 85% of this equity.