Secured Loans

They are usually for lesser amounts that secured loans typically are, often falling in the under £25,000 bracket. Instead of your home or other form of security being used to secure the loan, your earnings and credit history are used to make a decision.

Unsecured loans are sometimes called personal loans. They are not usually issued for anything of a speculative nature. They are also not usually given out for anything of a business nature either. These two activities both carry a greater risk factor, and lending institutions are usually not prepared to take the risk inherent in the situation. Certain other activities may also be exempt from approval, depending on the actual circumstances. Things like the purchase of a time-share property, for example, may be viewed as too risky for the purposes of an unsecured loan.

Usually the first thing that anyone considering an unsecured loan will look at is the annual percentage rate, or APR. The APR may well differ, depending on how your application is made. You may find that making an online application will command a lower APR than an application made by telephone, or even face to face in the bank or building society premises.

The main reason for this is that online applications have been automated, which lower the lender's overheads. Because of this the savings realised by the lender can be passed on to you, the borrower. The APR is not, unfortunately, a definitive thing. Lenders state the APR in different ways sometimes, and it's wise to be aware of this, as it will impact your bottom line when it comes to making repayments.