UK Loans - Personal Loans - Online Quotes

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A loan to a private person by bank building society or other lender for domestic purposes like buying a car, there is usually no security required and consequently a higher rate of interest is charged. Repayments is usually over a fixed period. This is a more expensive way of borrowing from a bank than by means of a overdraft.

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Personal Loans

Personal Loans fall into two categories; secured and unsecured. The problem with secured loans is that you need some form of collateral and the lender can force you to sell your security to meet however much is left outstanding on the loan. The risk for the lender is low, they know they will recover any financial loss and this low risk is reflected in the interest rates. If the risk is low then expect a lower interest rate. You should also expect to be able to borrow more.

Of course a lot of people are not prepared to risk their house and as property is a common form of collateral then an unsecured loan is an attractive alternative. The downside to an unsecured loan is that you can expect higher interest rates as you are high risk and expect your borrowing amount to be less.

Secured Loans

Ideal if:

• You are a homeowner
• You need to raise large amount i.e. home improvements
• Have been turned down for an unsecured loan
• Have a poor credit history

Unsecured Loans

Ideal if:

• You do not own property
• You do not need to raise large amounts i.e. less than £25k

Top Tip :compare the Annual Percentage Rate (APR) of different lenders.