Unsecured Loans
What is this?
Sometimes called personal loans so, if offered one by a lender, you should verify that he is not offering a second charge loan. These loans are NOT secured on property and tend to be for a shorter term than mortgages and secured loans. Because of the relatively greater risk, unsecured loans usually carry a higher interest rate than mortgages or secured loans.
Who is it for?
Unsecured loans are available to everyone, provided they fit the lender’s risk profile. Applicants who have property are usually preferred as they will have a credit payment history which demonstrates they are able to make regular payments. Clean credit records are also preferred and provable income are also normally required. Acceptable applicants often prefer an unsecured loan so as not to reduce their equity in their homes. There are some lenders who will offer loans to applicants with impaired credit and/or without the ability to prove their income. Clearly, these lenders will charge much higher rates of interest to protect themselves from the increased risk.
Who is it not for?
Unsecured loans are not normally available for who cannot prove their income.
