1. Secured Loans although sometimes cheaper, carry a higher risk of causing financial problems if you find yourself unable to pay for a period of time.
2. Check the penalties you will be required to pay if you are unable to make a repayment.
3. Debt Consolidation loans usually reduce your payments because they spread your existing borrowing over a longer period of time.
4. Consider the total interest payable
5. Consider the cost of early settlement, especially for large loans.
6. When you compare interest rates, take into account any arrangement fees.
7. Seek independent financial advice if you are at all unsure about anything before you apply.
8. Some of the loan companies below may provide online applications with instant decisions.

What is a secured personal loan?

So, why do people take out secured personal loans? Well, firstly you may want to borrow money in order to increase your home's value by making improvements to your home. Others may take on a debt consolidation loan, which means that you take on a large loan for a long period, which pays, off your other loans and credit cards and you end up paying a smaller monthly payment than you were paying with all of your other loans together.

Secured loans offer lower interest rates, due to the lower risk that is being taken on by the loan company.

If you default on your payments, you will find that loan providers will be a good deal more patient with you. Because they know that they have your home as collateral for the loan, they will give you more time to recover from whatever problems you are having that are making you late on your payments. This is not guaranteed though, so take the time to plan your payments and make sure that you can make them comfortably before you take the loan out.

The application process is a lot longer with secured loans than with unsecured loans, due to the fact that your loan provider will need to value your home. The cheaper rate that you should get can make this worth the wait.

However, it is easier for you to be approved for a secured loan. Because you are betting your home that you can make your repayments. It is very likely that your loan is far smaller than the value of your home, so the loan provider will like those odds, and see it as less risk. Financial product providers like less risk, and especially like shared risk.

What is an unsecured personal loan?

On the plus side, your loan application would be processed quicker, meaning that you would be able to get hold of your money quicker. This is because your home doesn't need to be valued as part of your application. So, once you submit an application, you can expect a reply and a decision to be communicated very quickly.

Don't think, though, that by taking out an unsecured loan you are ridding yourself of all risks associated with borrowing money. If you default on your payments, you can have court proceedings taken out against you. This can lead in the worst case to your home having to be sold. The way that works is that if you can't pay the loan provider back with money, the court can order something of yours to be sold/ Depending on the amount outstanding on the loan, this could be your home. So, you can turn an unsecured loan into a secured loan by defaulting on your unsecured loan payments.

Because you don't have immediate security, you may find that the loan providers will be less patient with the fortunes of their investment. They're more likely to chase you aggressively should you be defaulting on payments. This means your credit record could be affected, which in turn lessens your ability to get any more loans or financial products.

Loan companies will check your credit record in order to get a credit score for you before they will give you any money. Your credit score is contributed to by your employment history, your accommodation history, and your repayment history with previous financial products.

It's all about striking a balance between getting quick access to funds and being prepared to pay the extra that you are charged for the privilege. As long as you are absolutely sure that you can make the repayments, secured loans are cheaper.