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Unsecured loans

A personal loan and an unsecured loan are the same thing, but providers use different names to describe the same product.

A personal loan is sometimes described as an unsecured loan because it allows you to borrow money without having to provide security against it, such as your home or car.

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Instead, an unsecured (or personal) loans provider will base their decision on granting you a personal loan by using your personal credit history. This is verified by a credit check to determine your credit rating.

How does a credit check work?

The lender will use an approved credit reference agency to make a search on your name and address, and any previous addresses, which you give in your personal loan application.

This credit check involves calculating your credit rating, which shows how risky it will be to give you a personal loan.

Each time a credit check search is requested by a lender, it will be noted on your credit rating by the credit reference agency and detailed in any future credit checks.

If you have had no previous credit issues, a credit check should be very straightforward and you should be eligible for the majority of personal loans. You can see your credit report for yourself with services like Credit Expert from Experian.

Unsecured loans

Will using uSwitch’s loans comparison service affect my credit rating?

No. Any information we gather from you is used solely to make an accurate comparison of unsecured personal loans. A loan provider will only ask for an actual credit check when you complete and submit a personal loan application.

The lender should always inform you if a credit reference check is being carried out. And you should also be told if credit account information will be stored with a credit reference agency.

I have a bad credit rating. What can I do?

Be honest and tell us when you make your comparison. There are some unsecured loans available if you have bad credit. If we cannot find a suitable unsecured loan, we will provide you with details of how you can still borrow the money you require.

It is always a good idea to check your credit report before you apply for an unsecured loan – that way you can see what a potential lender will see before you apply.

Unsecured personal loans made safe and easy

Now you know that an unsecured loan is just another name for a personal loan, and have understood how lenders rate those applying for them, it’s time to take the next step. To find the best personal loan for you, at no risk to your credit rating, go to our personal loans calculator.

Read more…

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Compare loans with uSwitch

Compare all sorts of loans from personal loans to debt consolidation loans.

Compare loans