You may not have a property in your name or you may not be interested to risk your home to avail a loan. If you are a homeowner, it does not mean that for every need you will risk your home to obtain the desired amount. In such conditions, you can go for loans without any security.
You can take these loans for any purpose like home revamp, paying for child's tuition fees, clearing small debts, buying a car or enjoying holiday tour. You are the sole decider of how to spend the loan money and the lender has no say in it.
Unsecured loans imply that the lender will approve the loan without taking any security. You are thus at no risk in taking such loans. The lender however would like to ensure that you are having a permanent income source to repay the loan amount in timely manner. For this purpose, lender will surely look into your income, the amount you can spare to repay the loan per month, your past bank statements and employment status. As there is no security involved, these loans are based solely in the lender's faith in the borrower. So the more the borrower is able to generate faith the more are chances of the loan approval and higher is the loan amount.
You can avail upto ?25000 as unsecured loans with repayment duration of 1-10 years depending on loan amount and personal circumstances of the borrower. But these loans, as they carry risks for the lenders, charge a higher rate of interest. The rate of interest depends on the credit scores of the borrower and a good credit borrower gets the loan at lower interest rate compared to bad credit one.
Bad credit people having damaged credit history of late payments, payment defaults or CCJs and arrears can also avail the bad credit unsecured loans. Lenders of these loans, are more interested in repaying ability of the borrower rather than bad credit.
Banks, financial companies and online lenders are sources of unsecured loans in the UK. Online lenders have lower interest rates on the loans and they also offer the comparison facility. Check your credit report before applying for the unsecured loans and pay the loans back in time to improve your credit score.
