Want to borrow without risking your house or car? Find out if an unsecured loan is right for you! Personal Loans Now offers access to a wide range of personal unsecured loans online, ranging from £500 to £25,000*, even for people with bad credit. You can get an instant decision with same day payout, and we only deal with FCA-authorised lenders. Apply today for the loan offer that’s perfect for you!

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Discover everything you need to know about unsecured loans in the UK.

Unsecured Personal Loans

Unsecured loans have risen greatly in popularity in the UK over the last few years. They are often a great option to fund a large purchase, carry out home improvements, or get a new business off the ground.

What are unsecured loans?

An unsecured loan is a type of personal loan that does not require you to provide any collateral. Many people prefer unsecured personal loans because they are not putting your personal possessions at risk. If you do default on the loan, the lender doesn’t have a claim on your assets at all.

This does not mean that you can now freely default. Repaying your loan late or not at all will have a negative effect on your credit file, which can create problems for you in the future.

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What are unsecured loan decisions based on?

With a secured loan, the lender has an ‘insurance’ that protects them from losing all of their money should the borrower not repay their loan. This is in the form of the collateral, which is usually a house (for a mortgage or secured homeowner loan) or car (for a car finance or logbook loan).

With an unsecured loan, however, the lender has no ‘insurance’. Therefore, they are relying on the personal credit history of the borrower, and their projected ability to repay. They verify these details using a credit check, which every lender must perform before granting a loan, according to the law in the UK. It is for this reason that unsecured loans are also called signature loans – the loan depends upon the value of the borrower’s signature only.

This explains why it may be difficult to obtain unsecured bad credit loans; these are very risky from the lender’s point of view.

How do unsecured loans work?

Discover the full story in our unsecured personal loans video below.

Why is it important to only deal with authorised lenders?

You may feel safer borrowing unsecured loans over secured loans because, should you be unable to repay it, the lender has no claim over any of your assets. You aren’t at risk of losing your house or car, for instance. However, it is still vital to ensure that you are dealing with an FCA-authorised, legitimate lender. There are loan sharks out there who pose as respectable lenders but hide many charges in the small print, and may resort to physical threats to get their money. When you apply with Personal Loans Now, you can relax in the knowledge that your application form will only be sent to trusted, FCA-authorised direct lenders in the UK.

How fast can I get an unsecured loan?

You can apply for an unsecured personal loan online by filling out our simple application form here. Your application will then be analysed by Monevo’s unique technology to determine which UK direct lender is most suitable for your needs, and they will receive your application for consideration. If they approve the loan, you will receive a contract to review and sign, before the money is deposited in your account. All of this happens very fast – you will have your loan decision within an average of 90 seconds.

How much can I borrow with an unsecured loan?

Unsecured loans tend to be for smaller amounts than secured loans, but you can still find lenders that will offer larger sums. Some payday lenders will lend as little as £50, but most don’t go higher than £2,000. At Personal Loans Now, you can borrow from £500 up to £25,000* unsecured.

How can I find the cheapest deal on an unsecured loan?

Like with any big decision you have to make, it’s best to start by looking at your options. Shop around, check out as many different lenders as possible. Don’t just look at the interest rates they are offering, remember to look at their fees, terms, and loan amounts too. It’s important to consider how well each one matches up with your specific needs.

For example, a 6-month unsecured loan will be cheaper overall than a 12-month one. However, the monthly repayments for the 12-month loan will be much smaller and more manageable, and you have the money for double the time. Don’t just jump for the cheapest loan; think carefully about what you need, and which lender will best provide it.

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Using a loan comparison site can be useful. These websites compare the main elements of the loans provided by different lenders. This may help you understand what your options are much faster and easier. Still, don’t just rely on one comparison site – it is recommended to examine at least two, as you will see a broader range of lenders that way.

At Personal Loans Now, we aim to give you the ultimate unsecured personal loan experience. We completely eliminate all the hassle involved in shopping around by doing it all for you. When you submit your application form with us, you can be sure that it is forwarded directly to the lenders who can offer a loan most suited to your personal situation, and you will be offered the best personal loan rates available to you.

Apply now for the ultimate loan experience.

Different Types of Unsecured Loans: FAQs

Can I get unsecured personal loans for bad credit in the UK?

Unsecured loans are risky for the lender, so they prefer to lend to applicants with a good credit rating. However, many direct lenders specialise in unsecured loans for bad credit, so it is possible to obtain a loan. You may be tempted to opt for an unsecured loan with no credit check, but remember that these loans are illegal in the UK, and it is better to search for bad credit unsecured loans in the UK. We at Personal Loans Now will always do our utmost to ensure you get the right loan for your situation, regardless of your credit score.

What are the best unsecured business loans available in the UK?

It is common to need a loan when starting up a business, or to get an existing business through a tough time. Many unsecured start up business loans will require a personal guarantee, where the owner is personally responsible for the repayments should the business fail. It is vital to read the terms and conditions carefully before agreeing to this. Many people prefer unsecured business loans with no personal guarantee, and these are available in the UK from several lenders. The right loan at the right time can save your business, and we at Personal Loans Now would love to help!

Can I get an unsecured loan for bad credit with no guarantor?

Lenders are often wary of lending to applicants with bad credit, so finding a guarantor to co-sign makes obtaining a loan much easier. However, it is often difficult to find a guarantor, so many people just search for unsecured loans with no guarantor instead. It is indeed possible to obtain unsecured personal loans for bad credit with no guarantor. At Personal Loans Now, we accept your application no matter what your credit score is, and we will never ask for a guarantor. So, we are the perfect place to find an unsecured loan for bad credit with no guarantor – and no fees!

Is an unsecured debt consolidation loan for bad credit a good idea?

If you have many different debts, consolidating them into one loan can be a great idea – as long as you end up paying less overall. An unsecured debt consolidation loan means that you will not lose any assets such as your house if you cannot repay, although your credit score will take a hit. It is possible to find unsecured debt consolidation loans for poor credit with low interest rates in the UK, and depending on your situation, an unsecured debt loan may be the best way out of debt. Apply now with Personal Loans Now to see your options.

How much does an unsecured loan cost?

Generally, you will have to pay back the amount of money that you borrowed as well as interest on the loan. The figure to look at when comparing interest rates is the Annual Percentage Rate (APR), which every lender has to display clearly on their website.

You can use an unsecured loan calculator to work out the total cost of borrowing. Here is an example of how an unsecured loan calculator works:

Loan amount

£2,000

Loan term

36 months

APR

45.3%

Total repayment cost

£3,380.40

Why are unsecured loans expensive?

In general, a lender will set the interest rate based on the level of risk they feel they are undertaking. The higher the risk, the higher the interest rate. Because unsecured loans do not offer the lender any security, these loans are by nature high risk. Therefore, they are usually more expensive than secured loans such as a secured homeowner loan or a car loan.

For this reason, lenders are also often unwilling to lend larger amounts of money. So, unsecured loans are usually for smaller sums than secured loans.

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Unsecured bad credit loans direct lenders

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People often search for unsecured loans with direct lenders only, particularly if they have bad credit. This is because often, a broker will take their application and pass it to many different lenders to try and get it approved. If the applicant has bad credit, this can result in many credit checks and they may not even get a loan out of it. At Personal Loans Now, we do things differently. Your application will be processed by Monevo’s technology to discover which lender is most suitable, and it will only go to them. You’ll get a much higher approval rate, and it saves you time and effort. Best of all, you won’t be charged a penny for our service! No hidden fees, guaranteed.

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When you need the money fast, you don’t want to be left hanging while the lender decides whether to lend to you. We believe in instant decisions, which is why we will give you a decision within approximately 90 seconds of pressing the ‘apply’ button. No paperwork, no lengthy back-and-forth processes, just a quick yes or no. We appreciate how valuable your time is, and don’t want to waste it.

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It’s tempting to search for a no credit check unsecured loan, but these need to be avoided. In the UK, it’s illegal to issue loans with no credit check, and so regardless of your credit history, it is important to stay away from lenders who claim to offer them. At Personal Loans Now, we accept applicants with all types of credit history. Even if you have very bad credit, we may still be able to find you a loan.

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Secured versus unsecured loans

We’ve mentioned several times on this page that unsecured loans are different to secured loans. What exactly is the difference? What effects does this have on the service a lender provides? And which one should you choose?

A secured loan uses security, an asset of the borrower that the lender can take if they fail to repay. These loans are not so risky for the lender, so they tend to offer much larger loan amounts for lower interest rates.

If a borrower defaults on an unsecured loan, however, the lender has no way of getting back their money. These loans are therefore by definition high-risk for the lender, so they are usually reluctant to lend higher amounts, and will balance the risk with higher interest rates.

So are secured loans always better? The problem with secured loans is that the borrower has a serious risk of losing the security. This is often something substantial such as their car or house. It may be cheaper, but if you are likely to default, it’s not worth the risk.

Should I choose a secured or unsecured loan?

When you’re trying to decide between these two types of loans, there is a lot to consider. For simplicity, we’ve summed it up in this infographic. Simply answer the questions to see which loan is best for you.

Personal Loans Now - unsecured loans

To sum up what we’ve learned so far, here is a list of some of the pros and cons of an unsecured loan:

Pros Cons
You are not risking an asset such as your house or car if you default Defaulting can have a big negative impact on your credit rating.
They are easier to obtain with far less paperwork The loan amounts tend to be for less than secured loans; generally less than £25,000
There are many lenders who offer these loans, so they are very widely available It can be hard to be approved if you have bad credit
The interest rates are often higher than for secured loans

It is important to consider all of these points before reaching your final decision. Remember, borrowing money is a serious issue. You must explore your options thoroughly first.

Should I borrow an unsecured loan?

To make things easier for you, we’ve put together a checklist of things to consider before you press that apply button.

  1. Secured or unsecured? Use our infographic above to help you decide!
  2. How’s my credit score? If your credit rating isn’t so good, you may not be eligible for the advertised interest rates, and may be offered more expensive loans only.
  3. Is there a cheaper option? Look around to find out what APR lenders are charging, don’t just go with the first lender you see.
  4. How much will I have to repay? Calculate the total amount you’ll have to repay, including interest rates, fees, and of course, the original loan amount.
  5. Can I afford the repayments? Not only is it important to look at the bigger picture, but you must make sure you can afford each individual monthly repayment. Take a realistic look at your budget. Will you afford the extra monthly expense?

Personal Loans Now - unsecured loans

  1. Are there any extra costs? You may plan it out carefully, but a fee you didn’t know about can ruin all the plans. Lenders must make their charges clear, so make sure you read the terms of the loan to find out about them in advance.
  2. Can I repay the loan early? If you find you have more money available, you may want to repay more, or even the entire loan, earlier than planned. Is this possible? Will you be charged for it? Find out your lender’s policy.
  3. What will happen if I don’t repay? In general, when we take out a loan we are convinced that we’ll repay it all as planned. But life doesn’t always work out that way. So, it is important to know what will happen if you don’t repay. We’ll discuss this now in more depth.

What happens if I don’t repay an unsecured loan?

If you default on a secured loan, the consequences are obvious. You lose the assets that you’d used as collateral. But what about defaulting on an unsecured loan? All lenders have their own policies. For example, one may charge you immediately upon missing a repayment. Another may give you a grace period before adding charges.

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In general, the loan will be passed on to the collection department. Interests and charges may be added to the loan, so it’s a good idea to pay back as much as you can, as soon as you can. If the loan is still not repaid, the unsecured debt may be sold on to a debt collector. In the worst case scenario, the borrower may be taken to court (a CCJ).

Missing an unsecured loan payment will almost always have a negative impact on your credit score. Having bad credit makes it harder to find loans. So, you should always try to avoid borrowing if you aren’t sure you’ll be able to repay.

Unsecured Loans from Personal Loans Now

For many people in the UK, unsecured personal loans are their best option for credit. At Personal Loans Now, we promise to always do our best to ensure you get the right personal loan for you, regardless of your credit history. We won’t keep you waiting – you’ll receive an instant loan decision in just 90 seconds, with same day payout of £500 to £25,000 if approved. We work with Quint, an FCA-authorised credit broker, so you can be sure you’re in good hands. Apply now for an unforgettable loan experience .

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