Unsecured Loans

What are unsecured loans?

An unsecured loan isn’t secured against any of your assets. The opposite is true of a secured loan, which you might take out against the value of your property or car.

This type of borrowing is often more expensive because lenders view it as a higher risk. However, they’re also made more easily available and are often quicker to put in place.

How do unsecured loans work?

Your chosen lender lends you an 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 gamble – if you fail to pay, they can’t claim your property or car as repayment.

To take out an unsecured loan you need to decide how much you’d like to borrow, and the schedule and amount of repayments. We’ll match your requirements against a wide panel of lenders to find the right deal for you. If your application is successful, the money will be transferred to your bank account.

Applying for an unsecured loan

Borrowers of all ages, occupations and situations can successfully secure the cash they need, thanks to the wide variety of loan products on offer via Norton Finance.

Whether you’re applying with or without a guarantor, or if you have a bad credit history or CCJs, it is possible to obtain an unsecured loan. Even if you’re receiving benefits, self-employed with no proof of income or retired, Norton Finance can usually help you apply for a way to ease your situation, as long as you can afford the monthly repayments.

Am I eligible for an unsecured loan?

At Norton Finance, we help people from all walks of life get unsecured loans. We accept everyone from homeowners to tenants, students to pensioners.

Whether you’re looking to consolidate debt, improve your home or build a better credit rating, your personal circumstances should not be a barrier to your borrowing.

Pros and cons of unsecured loans

As with any financial product, there are pros and cons to unsecured loans.

Are unsecured loans bad for my credit rating?

No. In fact, a well-managed loan repayment can help you to improve your credit rating. 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.

Why is an unsecured interest rate higher?

Using our unsecured loans calculator, you may have noticed that the interest rate is often higher with this type of borrowing. That’s because the lender doesn’t have any security to protect the money they’ve lent to you. To compensate for this, lenders charge higher interest on unsecured loans.

Some other factors also make a difference to the interest rate you’re offered. If you are employed, with good credit history and your name is on the electoral register, you may be in a better position to negotiate interest rates.

What do I need to apply for an unsecured loan?

To apply online, you’ll need these details to hand in the first instance:

• Name and address
• Employment status
• Details of your income

Once you’ve supplied these online, we’ll be in touch to take the next steps. Ahead of our introductory call, it would help speed up the process to gather together all the information you have about other existing loans. If you’re planning to use your loan for debt consolidation, this will help us move things along a little faster.

Unsecured Loan FAQs

Please click below for the answers to our most commonly asked questions. If you can't find the information you need, call us free on 0800 694 5566 and one of our advisers will be happy to help.

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 10 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.

What happens to an unsecured loan after death?

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.

What is a soft search?

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 no one else.

Hard credit searches, on the other hand, are visible to other lenders and may negatively affect your credit score if they lead to unsuccessful loan applications.

How many unsecured loans can I have?

There’s no official limit to how many unsecured loans you can have at one time. However, lenders are under no obligation to lend to you, and they will become aware of multiple applications when they search your credit history. If a prospective lender sees lots of unsecured borrowing on your record, they may increase the interest rate you’re offered, or refuse your application.

What happens if I default on an unsecured loan?

If you default on an unsecured loan, the lender may 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.

Can an unsecured loan become secured?

Yes, but only 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. In this respect, the unsecured loan can become a secured loan. You can learn more about this here.