What is an unsecured loan?
An unsecured loan is a loan that doesn't require any assets to be offered as security. They are a popular choice for borrowers, as they can be quick to arrange and can be used for various reasons.
However, if you have any complex circumstances, such as bad credit, it may be more challenging to get accepted. Therefore, you may need to look into alternative funding options, such as secured loans.
If you’re a homeowner, and need unsecured finance, our specialist lender Norwich Trust could help. They have options from £3,000 up to £20,000, with repayment terms ranging from 3 to 10 years. Their team will help you find the best deal they have available for your specific plans and circumstances.
What can unsecured loans be used for?
There are a variety of different legal plans you can fund with unsecured borrowing. Some of these plans may include:
Home maintenance and improvements
Debt consolidation
Car purchases
Weddings
Holidays
Essentially they can be used for virtually any legal purpose, but if you require a large amount of funding unsecured loans may be limited to the amount you can borrow.
How do unsecured loans work?
You borrow money from a lender and agree to make monthly payments until the loan is repaid in full, together with any interest owed.
Interest rates can be fixed for the entire period of the loan term, so you will know exactly how much your monthly repayments will be. However, if you get a variable interest rate, your repayments may fluctuate each month.
Overall, it’s a very similar process to many other finance options, so it’s quite easy to get started.
How do you apply for an unsecured loan?
Applying for this option could not be any easier for you via Norwich Trust. All you need to do is follow our three steps below for a simple application process:
1. Click on the button below and start filling your details in the form on our partner’s website.
2. Once you’ve submitted your details one of our partner’s advisors will contact you to discuss your options.
3. After talking through your options, you then decide whether the product is right for you or not. If it is the team will get started on organising your funds for you.
Are there any alternatives to unsecured loans?
There are some alternative finance options you can use that could help you fund your plans.
The first alternative you might want to consider is your personal savings. This can be the best option as you won’t have to borrow money from a lender or bank and therefore, won’t have to make monthly payments or incur interest on money that you would have borrowed. So if you’ve got money saved up that would sufficiently cover the cost of your plans, it may be worth thinking about this first.
You could also consider using a credit card to help you fund your plans, however you should ensure you properly research this option in order to establish whether it’s right for you. It’s also worth researching which credit card would be best for funding your plans. One thing to remember is that if you do not repay the credit card balance in full each month, unless you’re using a 0% interest credit card, you will incur interest on the outstanding balance which can quickly increase what you have to repay.
Another alternative is a secured loan, which is a funding option that takes your home as security. By doing this it reduces the risk to lenders, which means they can be more flexible when it comes to qualifying criteria, repayment terms and loan sizes. This option may be more appropriate for people with complex circumstances who are struggling to get accepted for unsecured finance or for those who find unsecured finance does not meet their requirements.
The final option is a buy to let secured loan, whereby you use a rental property you own as security rather than a residential property. This can be particularly useful if you’re a landlord who needs to access funds, but either doesn’t have or doesn’t want to use your home as security.
All in all, there are a number of different finance options you can use instead of unsecured borrowing. It’s worth researching each type so you can assess which option may be the best for you and your plans. If you’re unsure what option is suitable for you, it could be useful for you to seek independent financial advice.
