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Unsecured Finance · The Basics

The Unsecured Finance 100.
The Basics

Focus: Definitions, core concepts, and suitability.

20+Questions
100%Expert Answers
FCARegulated
Are peer-to-peer loans considered unsecured loans?
TL;DR Peer-to-peer (P2P) loans are generally unsecured, relying solely on the borrower’s creditworthiness. We explain whether peer-to-peer loans are considered unsecured loans, the typical risks involved, and when P2P platforms might offer secured alter…
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What are the alternatives to an unsecured loan?
TL;DR Need finance but unsecured loans aren't right? Explore alternatives like secured loans, credit cards, remortgaging, or specific forms of debt consolidation. Understand the risks and benefits of each option.
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Can I get an unsecured loan if I am self-employed?
TL;DR Being self-employed doesn't stop you from getting an unsecured loan in the UK, but lenders require specific proof of income. Learn how to strengthen your application, what documents you need, and alternative funding options available.
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Are there penalties for early repayment of an unsecured loan?
TL;DR Early repayment of unsecured loans often involves a penalty, known as an Early Repayment Charge (ERC). Learn how UK regulations govern these fees, how they are calculated, and if early repayment is right for you.
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What factors affect unsecured loan approval?
TL;DR Understanding unsecured loan approval factors is crucial. We detail how credit score, income stability, existing debt load, and affordability checks influence your application success in the UK.
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What happens if I miss a payment on my unsecured loan?
TL;DR Missing a payment on an unsecured loan can severely harm your credit score and incur fees. Learn the immediate steps you should take and how to manage the consequences.
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Can I pay off an unsecured loan early?
TL;DR Learn if you can pay off your unsecured loan early in the UK. Understand Early Repayment Charges (ERCs), how to calculate potential savings, and the rules governing consumer credit.
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What are the current unsecured loan interest rates in the UK?
TL;DR Need to know what the current unsecured loan interest rates are in the UK? We break down the factors influencing APR, from your credit score to the Bank of England Base Rate. Learn how to secure the best rates.
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How long do I have to repay an unsecured loan?
TL;DR Unsecured loans typically range from 1 to 7 years, but the term depends on the loan type, amount borrowed, and lender's policy. Learn how to choose the right repayment schedule for your financial stability.
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How are interest rates calculated on unsecured loans?
TL;DR Understanding unsecured loan interest rates is key. We explain how lenders calculate APR, the impact of credit scores, and the difference between simple and compound interest.
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What are the age requirements for an unsecured loan?
TL;DR Discover the UK age requirements for unsecured loans, including minimum and maximum limits set by lenders. Learn how age affects eligibility, affordability checks, and credit scoring.
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How much can I borrow with an unsecured loan?
TL;DR Discover how much you can borrow with an unsecured loan in the UK. We explain the key factors lenders assess, from credit history to income and affordability checks.
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Can I get an unsecured loan without a credit check?
TL;DR Unsecured loans typically require a credit check as lenders need to assess risk. Find out why it's difficult to get an unsecured loan without one and explore alternatives.
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What income is required to qualify for an unsecured loan?
TL;DR Unsecured loan qualification depends heavily on income. Learn how lenders assess affordability, credit score impact, DTI ratios, and the minimum income required to qualify for an unsecured loan in the UK.
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Can I get an unsecured loan if I am unemployed?
TL;DR If you are unemployed, getting an unsecured loan can be challenging as lenders require proof of income. We explore alternative income sources, benefit types, and options available to UK residents seeking funding.
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What is the minimum credit score needed for an unsecured loan?
TL;DR There is no universal minimum credit score for unsecured loans in the UK. Lenders set their own thresholds, typically requiring a 'Good' rating or higher. Learn how scores affect eligibility and rates.
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What is the interest rate on unsecured loans?
TL;DR Unsecured loan interest rates vary widely based on your credit score, the loan amount, and the provider. Learn how APR works, why your rate might differ from the advertised rate, and key factors influencing the cost of borrowing in the UK.
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How long does it take to get approved for an unsecured loan?
TL;DR Discover how long it takes to get approved for an unsecured loan. Learn about instant decisions, manual review times, and factors like credit checks and documentation that influence when you receive your funds.
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What is the typical process for getting an unsecured loan?
TL;DR Need an unsecured loan in the UK? We detail the typical process step-by-step, from initial research and application to receiving funds. Understand credit checks and approval criteria.
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What documents do I need to apply for an unsecured loan?
TL;DR Applying for an unsecured loan requires specific documentation. Learn exactly what proof of ID, address, and income lenders typically need to process your application quickly and efficiently in the UK.
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Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status. We may receive commissions that will vary depending on the lender, product, or other permissable factors. The nature of any commission will be confirmed to you before you proceed.

More than 50% of borrowers receive offers better than our representative examples

The %APR rate you will be offered is dependent on your personal circumstances.

Mortgages and Remortgages

Representative example

Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

Secured / Second Charge Loans

Representative example

Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

Unsecured Loans

Representative example

Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

Authorised and regulated by the Financial Conduct Authority – Number 681423
The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

Website www.promisemoney.co.uk