Loans FAQ

Personal Loans

Unsecured or Personal Loans are loans that do not require any form of security. They are generally offered via Banks and Building Societies and are governed by the 1974 Consumer Credit Act. This limits the maximum loan size to £25,000, although some lenders will choose to set a lower amount.

Personal loans are usually offered for a range of amounts over a range of repayment terms. Lenders will typically set a minimum and maximum term that the loan may be repaid over. They may also choose to set a minimum and maximum age of individuals to which they will lend.

Secured Loans

A secured loan or homeowner loan is a loan secured on a property and hence only available to property owners. If you can’t repay the loan, the lender can like a mortgage company, repossess your home to get their money. Repossession, however are very unusual. Secured loans can take longer to arrange than personal loans as a valuation may be required by the lender.

Why Choose a Secured Loan?

There are a number of reasons a personal loan may offer the best solution.

1. Secured loans may be easier to obtain. Personal loans are often aimed at individuals with good credit scores. Therefore if you have had any credit problems in the past you may not qualify.

2. Secured loans may be used by individuals requiring larger amounts. The maximum amount of an unsecured loan is £25,000.

3. Secured loans may be taken over longer periods. Typically a personal loan is taken over a period of between 1 and 7 years. Secured loans may be taken over periods up to 20 years.