Unsecured Loans

Many lenders provide loans without any charge on your home or other assets, i.e., unsecured personal loans. Depending on the APR, this type of borrowing may be a more suitable alternative compared to borrowing with credit cards or bank overdrafts, especially if you are looking at borrowing over a short to medium term, 1 to 5 years. And if your credit rating is satisfactory you can get quite competitive rates.

You are not risking your property with an unsecured personal loan but it also means that the interest rate on the loan is usually higher compared with loans secured on property. Some increase in the APR is generally reasonable because the lender's risk has increased. As a general guide, the more you borrow and / or the better your credit standing, the lower the interest rate will be. Fixed repayments usually have to be made on a regular monthly basis, unlike credit card payments, and if you want to completely pay off the unsecured personal loan before the end of the term, there are often early repayment charges.

You can find the best deals online by checking the APR and terms offered by the lenders. Many now have online quotation facilities which make it convenient for you to check them out before making your decision.