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An unsecured loan is what it says, a loan 'not secured' on your property, for you to spend as you would like. Many people use them to get a car, a dream holiday, home improvements, or possibly to settle spiralling credit card debts in one go, thus freeing you to spread the payments over a longer time with a smaller interest charge.
With an unsecured loan, what amount can I borrow?
You can normally take out an unsecured personal loan for up to £15,000 (if you have a good credit history) but certain unsecured loan companies can give you as high as £25,000 unsecured (if you have an EXCELLENT credit history). However, bear in mind that you are required to have the financial capacity to meet the monthly loan repayments. With unsecured loan companies, you can normally get approval in principle over the telephone.
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What are the min/max repayment periods for an unsecured loan?
This partly depends on the unsecured lender. Some unsecured loan companies will offer an unsecured loan for as little as one year, though a 5 to 7 year term is more likely. The maximum unsecured loan term is typically 7 years but certain unsecured loan companies will lend over 10 years. Unsecured loans are suitable for those who want to repay something within a few years. If you only need the money for a period of, for instance, six months, using a credit card may be better.
How does an unsecured loan interest rate operate?
Unsecured loan APRs are usually fixed for the duration of the unsecured lending agreement, which means you know specifically how much you have to repay each month. The disadvantage is that you could pay more than borrowers who get a similar unsecured loan in 6 months' time - on the other hand, you may very well pay less! Either way, you will not have to be concerned about loan repayments shooting up. Some unsecured lenders will request that you agree to a direct debit for the loan instalments. Typically, the rate of interest is less when you borrow a larger unsecured loan. With unsecured loans, the crucial factor to be aware of is the Annual Percentage Rate (APR). In addition, it is crucial to consider how much the unsecured loan will cost you in total.
Will there be a credit check?
Yes, unsecured lenders have to be satisfied that applicants are a 'good risk' and therefore don't carry a past of credit problems and neglected debts. To achieve this, the unsecured loan company will check your credit file from a credit reference agency - Experian, CallCredit plc or Equifax. An adverse credit past will not automatically hinder you from obtaining a personal unsecured loan, nevertheless, you will most likely have to pay a higher unsecured loan interest rate. You might find it harder to obtain an unsecured loan if you are self-employed or if you are just starting in a new job.
What is an unsecured loan insurance ?
This is an insurance plan you can take out to pay (under certain conditions) the monthly loan repayments if you cannot - for instance, if you've lost your job. Think with care whether this is actually necessary. Unsecured loan payment protection insurance (a bundle with the loan) is often expensive and if your financial position is unsteady, is it prudent to be increasing your debt load on top of it all? If you decide that you do need a payment protection insurance, enquire about exclusions and small print which could make it hard for you to claim from the insurance.
Author: Roberta Kelley writes on issues related to blackpool loans, loan instant and even .
We are hopeful that you have learnt something from this article and that it has helped you in your research for halifax loans or any other star loans, fast unsecured loans or best buy unsecured loans.
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