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Unsecured Personal Loan

The usual way to get large amounts of money

An unsecured personal loan is basically a plain vanilla loan- it's not secured against your home, and usually carries an interest rate of between 7% and 12%. Within the consumer credit act, unsecured loans can run to £25,000; but in general most lenders will offer you between £500 and £15,000. Typical purchases include holidays, cars and home improvements.

An unsecured personal loan is pretty much the normal way to get a large amount of money for a range of expensive things- home improvements, holidays, a new car etc.

Don't be afraid of the term "unsecured"- it simply means that the loan has no collateral; i.e. the lender has lent you the money without contractually getting their greasy hands on a piece of your property in case you don't pay. A loan secured on your home, for example, means that the bank can take away your home if you don't pay. With an unsecured loan, they can still send the bailiffs round eventually, but they're obliged to find a better solution first.

And "personal"? Well in the old days, the place you got a loan was a bank- and it was called a bank loan. Nowadays, everyone from insurance companies to supermarkets is selling financial products, hence the term "unsecured personal loan"

Before signing up to a loan, notice that you are entering into an agreement. You'll get money, but you'll pay it back in a structured way- each month (with some exceptions- Egg have a flexible loan which allows payment holidays, for example; and the Clydesdale will even let you make weekly payments). So before taking out an unsecured personal loan, decide whether your credit cards can offer a better deal, and certainly conduct a financial review to see if you're spending efficiently in the first place.