The terms of unsecured loans are based on your credit report
Unsecured loans are not secured against your property or assets
Repayment can be spread over a period of between one and 7 years
Interest rates are usually higher than secured loans
If you have a bad credit history, your application may be declined, which can lower your credit score
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Representative example: If you borrow £12,000 over 4 years at an interest rate of 16.9% APR (fixed) you would pay £338.36 per month. The total charge for credit would be £4,241.28. The total amount repayable would be £16,241.28
An unsecured loan is an agreement between the lender and a borrower that is not secured against an asset. This is the opposite of a secured loan, which you might take out against your property or car.
Unsecured borrowing tends to mean higher interest rates because there is a higher risk to the lender. However, secured loans can be an option for those who do not have assets to secure their borrowing against and can be quicker to put in place.
When you take out an unsecured loan, your chosen lender will lend you a set amount of money, which you pay back with interest over an agreed time period.
The loan isn’t secured against anything you own so the lender is taking a higher degree of risk than on a secured loan. If you can’t keep up with repayments, they aren’t able to claim your property or car in lieu, but the lender could take you to court, where you may be liable to a county court judgement (CCJ) or debt collection.
Unsecured loans are available to many borrowers as repayment is based on your credit history and rating, rather than any assets or property you own. They are usually offered over a flexible period of time, usually at a fixed rate, allowing you to plan your payments carefully and ensure you can afford to borrow. If you meet your repayments on time and in full, unsecured loans can also raise your credit score over time – improving your chances of getting better credit in future.
If you have a low credit rating, the interest rates can be substantially higher for unsecured loans, especially if you borrow over a shorter term, meaning you end up paying more back. Missing payments may result in additional fees and charges, which could negatively affect your credit score.
Whether you’re looking to consolidate debt, improve your home or build a better credit rating, we help people from all walks of life get unsecured loans.
Before you apply for an unsecured loan, you should make an honest assessment of whether or not you can afford to pay back the loan, including the interest fees – failure to do so can negatively affect your credit score and leave you open to debt collection and court action.
You should also make sure you check your credit report to judge your likelihood of being approved, and check for errors in the information given about you, which could affect your application’s success.
To apply online, you’ll need the following details to hand:
Once you’ve supplied these online, we’ll be in touch to take the next steps. Ahead of our introductory call, it would be helpful to have your financial records handy, such as bank statements, monthly income and mortgage or rent payments. If you’re planning to use your loan for debt consolidation, it would help speed up the process to gather together the information you have about other existing loans, including repayment costs and loan periods.
Here are a few of the questions our customers often ask.
No. In fact, a well-managed loan repayment can help you to improve your credit rating if managed properly.
By making regular payments and repaying the loan in full within the agreed time frame – or before - you’re demonstrating to future lenders that you’re a responsible borrower.
However, if you fall behind on payments or default, your credit rating will be negatively affected.
Interest rates are generally higher on unsecured loans than secured loans because the lender doesn’t have any security, such as property, to protect the money they’ve lent to you.
They also may charge more interest if you have a low credit score or are paying off an unsecured loan from a different provider, due to the change in situation and associated risk perceived by the lender.
If a person dies and leaves unsecured loans unpaid, and they have no assets that can be exchanged, the debts will be written off. However, if the deceased has assets, the amount owed will be taken from their estate. You can read more about this here.
A soft search lets a lender see your credit report without leaving any trace of their search on your public record – so you will be able to see it, but other lenders won’t.
Hard credit searches, on the other hand, are visible and may negatively affect your credit score if they lead to unsuccessful loan applications.
There’s no official limit to how many unsecured loans you can have at one time. However, you should always make sure you can afford all the repayments and interest fees before taking out an additional loan.
If you have multiple loans, it’s also worth noting that lenders will be able to see this and may opt not to lend you more money if the perceived risk is high.
If you default on an unsecured loan, the lender can add fees or penalties to the total amount owed, and take legal action to recover their debt. Ultimately, the loan may be taken over by a collection agency, who will pursue you for the outstanding payments.
Yes, it’s been known to happen but isn’t customary. It may occur if you continue to miss your repayments to the point where your lender (or creditor) takes you to court. If this happens and you’re ordered to pay back the money you owe, a charging order might be used. This allows the lender to secure the debt against an asset you own, for example your property. You can learn more about this here.
At Norton Finance, we have access to over 600 loan products as well as flexible repayment plans.
How much can I borrow?
We help our customers borrow anything from £3,000 to £25,000 as an unsecured loan.
How long are the repayment terms?
Repayment terms range from one to 7 years, allowing you to select the period that suits your circumstances.
What are the interest rates?
The interest rate you’re offered will depend on your credit history, your current income and other financial details.
Are there any loan fees?
As a broker rather than a bank, we receive commission the lender pays us when a loan is completed. No broker frees are charged on unsecured loans.
There are many reasons people choose to take out unsecured loans, including:
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