Unsecured personal loans are available from £1000 to £1 million for those with a good credit history or those with sufficient equity in their
home to cover the loan (for those with a bad credit history).
These loans can complete in 48 hours and the loan can be for absolutely any purpose, for example a new car or exotic holiday etc.
Unsecured personal loans can be arranged for the employed or self employed, tenants or homeowners.
Before accepting your application for an unsecured loan, the loan company will carry out a credit check to find out your credit score, which is generally a rating of how much of a responsible citizen you are, and able to repay your debts.
This credit score is based on a variety of variables, such as your employment history, how long you have normally taken to repay loans and bills and any existing debts that you have.
To be successful in your loan application you should make sure your credit rating is as good as possible, although it is fair to say that if you are turned down for a loan it is unlikely that a bad credit rating will be the sole reason.
Please click here to read about credit scoring and credit history.
Please click here to read about the different types of loans available.
An unsecured loan will mean less risk to the person taking out the loan than a secured loan. This is due to the fact that a person will not have to use their home as insurance for the loan.
Another positive aspect of this type of loan is that your application is processed a lot quicker (usually within 48 hours) so you get a reply and answer very quickly to your application, and get hold of money more rapidly. This speed is due to the fact that your home will not need to be valued to make sure your security is available.
Just because you have submitted a loan application, it does not mean that you are under an obligation to take up the loan.
The negative aspect of an unsecured loan is that due to the lack of insurance, the interest payments set will be higher, as the loan provider will need to cover the added risk of not being able to get their money back.
If you take out an unsecured loan and then default on your payments, the loan provider can take out court proceedings against you. Effectively, they are taking out proceedings against your home, since, if you can't pay them back with money, then something may have to be sold to pay them back. So, in effect, if you default on the loan, you are in danger of turning a loan that was supposed to be less risky into a secured loan.
Obviously, the answer to this is not to default on an unsecured personal loan. Because their investments are less stable (that is, they do not have the initial security against your loan), it is often true that the loan providers will have far less patience with loan defaults, and are more likely to act aggressively in this instance. This usually means things such as contacting you straight away if they can't collect their payment on the set date etc.