| When it comes to getting a UK personal loan you | | | | You might think of a mortgage as a secured loan. The |
| have two choices. You can choose to get an | | | | bank lends you money to buy a house and they use |
| unsecured loan or you can choose to get a secured | | | | the house as a way to back up the loan. If you do not |
| loan. | | | | make your mortgage payments, the bank can seize |
| An unsecured loan is simply a loan you get based on | | | | your home. |
| your good name and your credit rating. Often the | | | | Or you can think of a secured loan as a pawn shop |
| interest rates are low the higher on an unsecured loan | | | | that lends you the money you want but lets you still |
| and on a secured loan because the risk is higher to the | | | | use the goods you pawned! |
| lending institution. If, for some reason, you are unable to | | | | So which one is the right one for you? It's a tough |
| pay back the loan and the lending institution does not | | | | decision to make. In most cases, a secured loan will |
| get any money back. However, your good name and | | | | get you a better rate, so you may prefer that. |
| your credit rating are potentially ruined. | | | | However, perhaps you don't have any assets |
| On the other hand, a secured load is a low you get | | | | available, or you don't want to risk the seizure of |
| when you put up some assets. The advantage of a | | | | certain assets if you are unable to make payments. In |
| secured loan is that you often get more money at a | | | | this case, you may not mind paying a little more for the |
| lower interest rate for longer repayment period that | | | | benefit of having an unsecured loan. |
| you would with an unsecured loan. This is because | | | | Both unsecured and secured loans are good options |
| you have some assets to backup your loan. The | | | | to have when you are doing your financial planning. |
| lending institution prefers this kind of loan because if | | | | You can use them to consolidate your outstanding bills, |
| you find yourself unable to make payments, they can | | | | leverage your house investments, or get the things you |
| see your assets as an alternative form of payment. | | | | need and want. And, with the choices between |
| Because the risk to them is diminished they are able to | | | | unsecured and secured loans, you have the benefit of |
| provide you with more attractive loans at a better rate. | | | | being in total control of your financial destiny! |