Types of Loan
These are the most common, everyday loans that most of us apply for and generally they will be unsecured, although if you purchase a motor vehicle, the loan company will most likely insist on it being secured on the car.
Home Owner Loans
As the name suggests, the majority of home owner loans are for home improvements and secured against property as security. Therefore you will usually be charged a lower rate of interest than with a personal loan.
Pay Day Loans
These loans need to come with a serious health and wealth warning! They are short term loans for relatively small amounts of money with rates of interest charged typically between 1500% to 4000%. When you compare that to the 5.5% charged on most personal loan rates you will understand why pay day loans are not for the feint hearted.
If you have exhausted all other avenues of borrowing money and it’s an emergency, then these types of loans may have a place but only if you are able to repay the loan by your next payday!
If you have concerns about your debts or about borrowing money, you can contact the Money Advice Service for help.