Loans

MoneyBright offers help and advice intended to arm you with information useful in your search for a loan!

There are so many different types of loans available in the UK from a whole host of banks and lenders. Deciding which one is the best for you and getting the best value can be tricky business! MoneyBright explains loans in plain, simple language!

Secured Loans

If you’re looking for a loan, one of the first things you will have to decide is whether you want an unsecured or a secured loan. Secured loans are only available to home owners and the following often applies to them:

  • Secured against your home and the amount you can lend is often based on how much equity you have in your property.
  • Secured loans usually have lower interest rates.
  • Secured loans are only available to home owners, or those who have an equally valuable asset.
  • If you fail to make payments, you risk losing your home.
Essentially, secured loans are a less ‘risky’ prospect for a lender, given that your loan is secured against it. It means the lender is often more likely to recover their money even if you are struggling to meet the monthly repayments. However, the often lower interest rates associated with secured loans are appealing to consumers who have no reason to believe they would ever struggle to make the repayments. However, you should always think carefully before securing any loans or other debts against your home. In the event that you do not keep up with the repayments your home may be repossessed.

Unsecured Loans

Any loan you take out will fall under the category of secured or an unsecured loan. Unsecured loans are those that are not secured against your home or any other assets. The following usually applies:

  • Unsecured loans are not secured against any asset or collateral and are therefore available to those without valuable assets.
  • Unsecured loans often come with higher interest rates than secured loans, largely because they are seen as more of a risk for the lender.
  • If you fail to make payments on an unsecured loan, your home will not be at risk.
Unsecured loans are the only option for those who do own their own home. However, they are also an attractive option for homeowners who do not want to secure their loan against their home, for the risk of repossession in the event of failing to keep up with repayments.