The terms personal loan and unsecured loan have become almost interchangeable in recent times. Most of the low rate high street personal loans you see advertised will be unsecured loans. These loans are limited in terms of the amount, repayment and importantly availability.
The low rates advertised are normally reserved for certain qualifying customers, with others being turned down or referred to other lenders. In the case of people who don't own their own home but rent from a landlord or council, then unsecured loans are the only type available. Factors such as other personal debts, income and employment record will all be considered during an unsecured loan application.
A special type of unsecured loan is one called "payday loans", where small amounts of money, say £400, are made available for short periods of time, say 3 or 4 weeks. These types of unsecured loans get their name from the fact that they are usually repaid in full once the borrower gets their next pay packet.
If you are looking for a consolidation loan, then it's unlikely that an unsecured loan is going to satisfy your need. If you alreay have high levels of debt that you may or may not be struggling to repay, then any lender will look carefully before advancing further sums to you. If you have a bad credit record then the situation is even more tricky and your range of options will be very reduced.
Because lenders use security to balance off some of the risk in lending money, they are able to lend larger amounts over longer repayment terms if they are able to include some security with the loan. With unsecured loans there will be a ceiling to how much you can borrow. However for people who can tick all the boxes in terms of credit history, age, income amd employment stability, unsecured loans can go up to £25,000.
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