An unsecured loan is essentially a loan for a one-off essential purchase. As these loans are usually for smaller amounts, lenders won’t require you to secure the loan against your home, however your credit rating will be taken into consideration and may determine the amount of money you are able to borrow.
They are known as unsecured loans to distinguish them from secured loans, or homeowner loans, in which the money you borrow is secured against your home.
Unsecured loans are often known as personal loans as they are a good option when you need extra money for small purchases and changes in your life, however it can be hard to find the right deal for you. Read on to learn about some of the benefits of unsecured loans and what other options are available to you.