Glossary - Unsecured Loan

Unsecured loans do not use property as security. Lenders risk is high and the interest rates they charge for this type of finance will be high. If an unsecured loan is to be repaid over a long period then more interest will be paid.
Unsecured loans are not prepaird for speculative purposes or for business use, these require a secured loan. Unsecured non homeowner loans are also known as tenant loans.

Example: Online UK Unsecured Loan
An unsecured loan can be arranged online, you don’t have to visit variuos premises and talk to strangers, you wont have to sit and explain why you are in the situation where you need to borrow. One of the easiest ways to work out the size of the repayments is to look at the interest rate the company will charge. By law the lenders have to inform consumers of the charges for this type of finance, they have to state what their (APR) annual percentage rate is.

Unsecured Loan Tip
Whenever there is difficulties repaying an unsecured loan contact the lender and explain. Some will have help lines or a department that is dedicated to helping customers with financial problems. If any arrears occur, contact the lender and explain why, this could result in a plan of action to stop the escalation of debt problems. If early action is taken a debt may become easier to handle. To assist with the budgeting it might be possible to extend the length of the unsecured loan and lowering the repayments. Be aware though that more interest will be paid back on an unsecured loan if it is a longer repayment term.

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