Broadly speaking, two types of loans are available in the financial market – secured and unsecured. Besides, there are many variants within these two categories. This wide spectrum of loans is meant for different types of borrowers. Homeowners, tenants, self employed professionals, etc., all have different requirements. They need loans that suit their purpose and circumstances.

Different loans cater to the diverse needs of the borrowers. A secured loan calls for a security that can be your home. However, you can borrow without security also. Such loans are called personal loans. Both types of loans have their own merits and demerits. So, you should compare loans and then decide what type of loan suits your financial requirements.

A large number of lenders have made the competition really tough. You might be a car buyer or a student looking for a loan. It is important that you compare loans and rely on your sound judgement. Secured loans are beneficial as these loans offer a lot of benefits. You can borrow up to £250,000 with the help of such loans. The repayment period is also flexible and can extend your repayments up to 25 years.

There are many factors that pull borrowers towards secured loans. The variety of options available for paying the interest is just one of them. It can be a fixed rate, variable rate, capped rate or discounted rate. In case of fixed rate, you pay interest irrespective of any market changes brought about by change in the base rate of interest. If you opt for variable rate of interest, the amount of instalment would depend upon the prevailing rate of interest. It may fluctuate in accordance with the changes in base rate of interest. It is relevant to know that monetary policy committee of the Bank of England meets every month and decides on the base rate of interest.