Lenders offer a wide range of personal loan products. The most common ones are bad credit loans, car loans, career development loans, cosmetic surgery loans, debt consolidation loans, education loans, holiday loans, homeowner loans, home improvement loans and wedding loans. Most of these personal loans can be availed in both secured (suitable for big and long-term monetary requirements) and unsecured (suitable for small and short-term monetary requirements) forms.

The difference between these two sub-types is the presence or absence of collateral.

To put it differently, 

• Secured personal loans means financial assistance against collateral
• Unsecured personal loans means financial assistance without collateral

 

The advantages that collateral brings to you are quick attention, high credit range (as high as £250,000), competitively low APRs, multiple rate plans, diverse payback methods and flexible loan conditions. However, these loans are available to homeowners and property owners only. The slow approval procedure, additional paperwork and a threat of repossession are the other disadvantages in case of secured personal loans.

In case of unsecured personal loans, the processing takes place very swiftly. Lenders do not take more than two to three days and your loan application is normally disposed off within this time frame. Other features include absence of time-consuming valuation procedure, less paperwork, quick loan approval and no threat of repossession. All these advantages have to be paid for in some other form. The rate of interest is higher in comparison to secured personal loans. The credit range varies from £500 to £25,000.

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