UK UNSECURED LOAN FAQ

What is an unsecured loan?

An unsecured loan is a personal loan which does not require you to offer security against the loan, in contrast to secured loans which require you to use your home as collateral.

Who tends to use unsecured loans?

Those who tend to use unsecured loans are generally those who are not in a position to offer to collateral, i.e. people who don't own a home or have adverse credit records, CCJ's, mortgage arrears or debt issues.

Do you have to be a home owner to successfully apply for an unsecured loan?

Although you aren't required to offer your home as collateral, many loan companies still require you to be a home owner in order to be eligible to apply for an unsecured loan.

What are the main benefits of an unsecured loan?

Owing to the fact that you will not have to offer your home as collateral against the loan, an unsecured loan offer less risk to the person taking out the loan than a secured loan.

Another benefit of an unsecured loan is the quick turnaround in applying for one. Since an unsecured loan does not require your home to be valued before the application can proceed, the turnaround from making an application to receiving an answer, and ultimately your loan, is much quicker.

Will adverse credit records, CCJ's, mortgage arrears or debt issues affect my application for an unsecured loan?

No. The success rate of applicants is very high, and adverse credit records, CCJ's, mortgage arrears or debt issues will not affect the loan application, although the general rule is, the better the credit record, the better the loan terms and rates.

What can unsecured loans be used for?

Unsecured personal loans can be used for a variety of reasons, including:

home improvements - a loan is taken out to carry out home improvements, with the aim of boosting the value of the home.

debt consolidation - a loan is taken out to pay off current debt, thus consolidating the debt into one controllable, longer-term loan repayment.

mortgage arrears - a loan is taken out to cover arrears in mortgage repayments, or to convert current mortgage repayments into a longer-term, more controllable loan repayment.

car finance - a loan is taken out to finance the purchase of a car, as the terms of an unsecured personal loan are more appealing than other car finance options.

adverse credit - a loan is taken out with a specialist loan company, who, despite previous adverse credit issues and problems being approved for a personal loan with other loan companies, are willing to approve an unsecured personal loan.

UK Loan Advice, sponsored by UKloan24

This guide to unsecured personal loans is sponsored by UKloan24.

If you are a home owner and can afford the repayments, UKloan24 can find the right unsecured loan for you.

Although it is fair to acknowledge that the better the credit record, the better the loan terms and rates, at UKloan24 adverse credit records, CCJ's, mortgage arrears or debt issues WILL NOT affect your unsecured loan application.