There are times when it’s necessary to borrow money, but there’s no need for it to be a costly or difficult business. lovemoney.com’s loans centre can help you to find just the right loan for you, by searching the whole market or choosing from our top loan products.
Unsecured loans, often referred to as personal loans, are available through all sorts of sources, including banks, building societies, and even high street stores and supermarkets. Borrowers are lent a lump sum of money by the lender, which they then pay back in regular, usually monthly, instalments. The lender will profit from this by adding interest to the amount the borrower pays back. This is usually a percentage of the original loan amount, and the size of this interest agreement is known as the Annual Percentage Rate, or APR. This is essentially how much the loan will cost for every year money is outstanding. This can be fixed for the term of the loan, or vary over time.
Secured loans work in the same way, with a lump sum being repaid over time at an agreed rate of interest. However, secured loans require collateral or security, which is often in the form of the borrower’s home. For this reason they’re sometimes called homeowner loans. Secured loans are more common for those who have poorer credit histories or who need a large amount of money.