An unsecured personal loan is a loan that does not require a form of security, such as a house or car being used to secure the loans
Instead the lender will look at you personal credit history to decide if the loan will be offered.
Please note, although some lenders refer to these loans solely as personal loans and some unsecured loans, they are one and the same thing.
Why should I choose an unsecured loan?
Before signing on the dotted line, it’s best to consider all your options. An unsecured loan could be the right choice if the following ring true:
- You’re only looking to take out a small personal loan
- You don’t own your own home
- You have a good credit rating
- You will be able to repay the loan at a fixed rate in a relatively short period of time
Will my application be successful?
Without your home as security, the lender will lower the risk by only lending to those with a good credit rating.
Your credit rating will be lower if you’ve missed any payments in the past or failed to pay on time. You might also score poorly if you’re not on the electoral register or if you have a County Court Judgement (CCJ) against you.
We recommend that you check your credit score before applying as a failed application can also impact badly on your score. If you’d like to know more about your credit rating, you can read our guide on how to strengthen your credit rating.
How do I choose the best personal unsecured loan?
It is impossible to know you’re getting the best deal without searching through all of the loans available. There are plenty of unsecured personal loans out there, and they all have good and bad points, extras and benefits, as well as their standard interest rate.
The best way to compare unsecured personal loans is by using a comparison service like the one featured on uSwitch.com.
It will search the loans market using the criteria you give it, and provide you with a shortlist of the unsecured personal loans that would be best for your personal circumstances.
You can even search for lenders that will accept you if you have had County Court Judgments (CCJs) or arrears, just take a look at our comparison of bad credit loans.
Is the uSwitch comparison service biased?
No. uSwitch makes its money through small commissions from some of the lenders featured and your results are based on the criteria you specify.
When you’ve entered your criteria into the personal loans comparison service and arrived at your results table, you can apply for your unsecured personal loan online.
The aim of the uSwitch service is to help you save money by finding the most suitable unsecured personal loan to match your personal circumstances and spending habits.
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