A personal loan is a lump sum borrowed from the bank or building society for personal use.
This could be a holiday, a wedding or a home improvement to name but a few. Taking out a loan is a big step and shopping around for the best deal could save you £100s.
What loans are available to me?
There are many different types of loans available on the market, including a home loan, student loan and car loans.
All these are for specific purposes but a personal loan can be used for personal expenditure.
What types of loans are available?
There are two types of personal loans:
- Unsecured loans
- Secured loans
What is an unsecured loan?
The unsecured loan is a personal loan that is not secured against any asset. This means that the lender is taking a huge risk, hence why the maximum you can borrow is usually £25k. To qualify for an unsecured personal loan you will need to have good credit history and provide evidence of sufficient earnings to repay the loan.
What is a secured loan?
A secured personal loan is secured against an asset, such as your home. This means that if you are unable to repay the loan the lender can repossess your home. The secured loans are available for up to £100k.