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Unsecured loans are loans that require no security for the debt. The amount of an unsecured loan tends to be lower than for a secured loan or a remortgage. Therefore an unsecured loan might not be viable as a method to fund a large extension but it might be suitable as a top up to existing funds. Alternatively an unsecured loan might be suitable to fund a smaller building project.
The amounts available to borrow and the payment terms vary a great deal. Unsecured loans start from around £1,000 and may go as high as £25,000.
The lender will usually ask you about the purpose of the unsecured loan as there will be some circumstances where a loan will not be provided. Home improvements are often acceptable as a reason for taking out an unsecured loan.
As with any loan you will need to compare rates and terms to make sure that you get the product that most suits your circumstances.
Don’t be put off if you have adverse credit or will have difficulty proving your income; there are lenders in the market who offer unsecured loans in these circumstances though you might have to pay a higher interest rate.
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