Unsecured Loan
Unsecured loans are available at banks, building societies and
other leading financial institutions and do not require security
to be offered against the debt. This means that you do not have
to be a homeowner to qualify for a loan.
Unsecured loans are usually covered by the terms set out in the
Consumer Credit Act 1974.
A lump sum is borrowed in return for making regular repayments
usually via direct debit and paid monthly. The repayment period
is fixed and is usually anything from 1 year up to 5 years. The
sum borrowed can between £1,000 and £25,000. If a higher
sum were required a security would usually be held against the debt,
such as a house or car.
Interest is charged on the loan and this can be fixed or variable.
An unsecured loan is usually fixed through out the repayment period
but can be variable for longer repayment periods, you will be informed
of this when you set up the loan.
The interest you pay will be quoted in terms of an APR, annual
percentage rate, and is the rate that you should use as a comparison.
When a rate is quoted it will usually be the typical APR, which
is the rate, offered to over 50% of successful applicants.
The exact rate you will be offered depends on the amount you want
to borrow, the repayment period and your own personal circumstances.
An unsecured loan can be used for any purpose, as long as it's
legal, although there are some restrictions on using an unsecured
loan for business or investments.
An unsecured loan is usually only available to people who have
a good credit rating.
Unsecured Loan lenders
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