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Secured And Unsecured Personal Loans

There are a great many loans available in the UK today, with many different lenders offering different incentives and specialising in different lending criterias such as debt consolidation loans or bad credit loans.

Before applying for a loans quote, you need to decide what type of loan you want. You can choose from two main categories; the first being unsecured loans which are available to homeowners and tenants. Or secured loans which are only made available to homeowners as they require a property to secured the amount lent on.

Secured loans are also known as home loans because of this feature of the loan that allows the lender to secure repayment on your property. - This isn't as bad as it sounds. The simple difference is this: unsecured tenant loans signify higher risk to the lender. For this reason you will not be able to borrow as much money, or for such a long period of time. Secured loans as you can imagine provide less of a threat to the lender, hence assuming you have the equity in your property to use, you can borrow more money over a longer period of time and typically for less money per month.

Secured loans are also widely used as a method of debt consolidation. Reducing monthly repayments on smaller unsecured loans, credit cards and store cards in to a single loan allows you to take advantage of lower interest rates. Cheap debt consolidation loans are a growing loans product in the UK, and so the selection of lenders offering this type of loan is far greater, resulting in bigger competition and lower interest rates.