Consolidating With an Unsecured Loan
An unsecured loan is what we we normally think of as a personal loan, such as the kind offered by banks and advertised heavily.
You can usually borrow up to £25,000 or so although this naturally depend on your circumstances. Rates can be very attractive, often under 10%, and this means that unsecured loans can be a useful way of consolidating more expensive debts such as credit cards, store cards, and overdrafts.
Approval Difficulty
The drawback is that as the loan is not secured on any assets, the lender has to be very confident that the money will be repaid, and this means that approval can be difficult.
If you have a good income with a steady job, no serious blemishes on your credit record, and live in a 'good' area, then an unsecured loan might be right for you. If you don't have these advantages, then getting your loan application approved is going to be more difficult. This is of course especially true in these post-credit-crunch times when finance is harder to come by for all of us.
Homeowner or Tenant?
Unsecured loans are available to people who rent their home, to those with a mortgage or own their home outright. Even though the loan will not be secured on a home, homeowners will usually find it easier to get a loan than tenants, as homeownership is usually a plus point in credit scoring systems.
Site is for information only and does not constitute personalised financial advice. E&OE.
