Unsecured personal loans
Unsecured personal loans are repayable on a monthly basis
at a fixed amount. They are not linked to any underlying
security, such as your home, hence the use of the term unsecured.
The upshot of this is that the lender will have little option
buy to sue you in the county courts to recover their money
in the event that you fail to repay the loan. Personal Loans
are offered by lending institutions such as banks and building
societies and are available in a variety of formats, each
of which may differ in the possible size, term and purpose
of the loan.
The maximum loan value and length of time over which the
debt is repaid will not be the same for car loans as for
payday loans, for instance.
The amount borrowed usually varies from £500 upwards and
is usually repayable over a period of between 6 months and
10 years. Lenders charge interest rates on the amount borrowed.
Their rates can either be fixed or variable. If the rate
is variable, the rate changes with market forces and could
change the amount you repay. Fixed rates offer more certainty
but can be at a higher rate. As a general guide, it is advisable
to compare the Annual Percentage Rate, (APR) of different
lenders.
Personal loans are repayable on a monthly basis at a fixed
amount. However, some lenders offer the option of over-payments
or under-payments that could assist you depending on your
current personal circumstances.
Unsecured loans can be difficult to obtain, particularly
for those with an impaired credit history, who will be forced
to pay a fairly high rate of interest if any willing lender
can be found.
