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Viewed: [278] | Comments: [0] | 3-02-2010, 22:00
Don't be put off by the title of the loan, an unsecured loan (also know as a personal loan) is actually a less risky loan for the borrower as they do not have to put up a valuable asset (usually a flat or house) as collateral to receive the loan.
Effectively it is a loan which is supported by the borrower's credit rating; rather than his or her assets.
Generally an Unsecured Loan can be any amount between £1,000 and £25,000 and though the borrower can choose different payment periods; generally the repayment period is 5 years or less.
So which loan is best for you?
There are a number of ways to choose – the easiest way is by comparing APR (Annual Percentage Rate.) This is a good place to start. You should also consider whether the loan is fixed rate (IE the interest stays the same throughout the loan period) and a variable rate which may rise or fall with changes to the bank base rate.
Do I need a good credit rating to get a Personal Loan?
Generally the lender will look at your creditworthiness when deciding whether to give you a loan. That does not mean that those with a poor or medium Credit rating cannot get an unsecured loan, but generally the credit rating of the borrower may affect the interest rate on the loan.
Effectively it is a loan which is supported by the borrower's credit rating; rather than his or her assets.
Generally an Unsecured Loan can be any amount between £1,000 and £25,000 and though the borrower can choose different payment periods; generally the repayment period is 5 years or less.
So which loan is best for you?
There are a number of ways to choose – the easiest way is by comparing APR (Annual Percentage Rate.) This is a good place to start. You should also consider whether the loan is fixed rate (IE the interest stays the same throughout the loan period) and a variable rate which may rise or fall with changes to the bank base rate.
Do I need a good credit rating to get a Personal Loan?
Generally the lender will look at your creditworthiness when deciding whether to give you a loan. That does not mean that those with a poor or medium Credit rating cannot get an unsecured loan, but generally the credit rating of the borrower may affect the interest rate on the loan.