By : George McGonigal
Personal loans can be either secured or unsecured. A secured loan is secured on a major asset, usually the borrower’s home.
They are cheaper than unsecured loans but if you continually miss repayments (default on the loan agreement) you risk loosing your home as it can be seized by the lender and sold to repay your debt, although this is usually a last resort for most lenders.
Secured loans are commonly used when borrowing larger sums of money over a long period of time.
The other type of personal loan is an unsecured loan. If you don't have a home or pay a mortgage then you can only take out unsecured loans.
Unsecured loans are usually available for smaller amounts (£500 - £15,000). These loans are more expensive because they are riskier for the lender as they can't repossess your house to recover the loan if anything goes wrong. Of course unsecured loans are also open to homeowners as well.
George McGonigal
George is webmaster of an online personal loan resourcs website for UK borrowers. We bring under one roof lenders who offer online quotations to allow our visitors to compare rates in the comfort of their own homes. Why not visit us at UK Personal Loans Online: or our definitions page at Terminology Explained or our Useful Links Page.
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