For a more detailed look at unsecured loans visit the unsecured loans 365 consumer information site.

Unsecured loans are personal loans that can be range in both loan amounts and repayment terms. An unsecured loan is not secured against property or other assets. The repayment term usually depends on the purpose for which you require the loan. The amount available usually ranges from £500 to £25,000 over a term of 6 months to 10 years, varying between lenders and products. You then have to pay an interest charge on the loan, which will be quoted as a percentage.

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The annual percentage rate (APR) is a calculation intended to allow consumers to benchmark the cost of borrowing. The APR is worked out by looking at the amount of interest you have to pay and the cost of any other fees whilst taking the effect of how often interest charges must be paid into consideration. So it’s a pretty way to compare loans.

Lenders quote interest rates in different ways. A typical rate is what is offered to the majority of applicants but the exact rate you receive can vary as it depends on personal circumstances. A fixed interest rate will stay the same throughout the term of your loan, regardless of any changes in the bank base rate. If the rate offered is a variable rate, it may rise or fall in line with any base rate changes during the term.

Personal loans need to be repaid on monthly basis. Some lenders allow you to make over payment which let you clear the loan over a shorter term. Other lenders offer payment break and payment holidays but interest usually still builds up on the amount owed. All loans come with small print and conditions so its always worth verifying the exact terms with the lender before agreeing.