Traditionally banks and building societies offered two types of loans; secured and unsecured. Secured loans were designed for homeowners who had a property that could act as security for the loan; unsecured loans were designed for tenants and non-homeowners who are unable to pledge a property as collateral. Secured loans typically had lower rates of interest than unsecured due to the presence of security.click here for more info
The general structure of the loan market has stayed the same; there are still secured and unsecured loans, and while the secured variety has stayed relatively similar throughout, the introduction of the internet has revolutionised the unsecured market.
Not only has there been an increase in the amount of lenders offering this type of loan but there has also been a vast increase in the types of unsecured loans available, each offering a different product at different rates in order to suit any financial requirements.
Here’s an overview of the types of unsecured loans available online:
- Guarantor Loans- A specialist bad credit loan designed for those who have been declined by a mainstream lender due to their credit history. These require a homeowner guarantor to support the application and guarantee to pay the monthly repayments should the borrower fail to do so. Loan amount available typically ranges from £1000 to £5000 over a term of 1 to 5 years.