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There are two types of loan, secured and unsecured.
Secured Loans
A secured loan is basically money lent to you where failure to repay it means you give up a particular item (the security). A common secured loan is a mortgage where the security is a property but it could equally be any item of high value from jewellery to an antique.
Secured loans are classed as lower risk and have lower interest rates.
Secured loans can be used for many purposes including:
- Debt consolidation
- Home improvements
- Holidays
- Cosmetic Surgery
- Special Purchases
- School Fees
- Car Finance
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Find out more about secured lending
Unsecured Lending
Unsecured lending is borrowing without any security. This is generally something such as an overdraft and low in value.
Unsecured loans usually have higher interest rates
Very few lenders offer unsecured loans and the best option is to talk to your bank about this. This is because they are probably the only ones in a position to know about your financial history and circumstances.
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