Secured / Unsecured Loans vs Short Term Loans

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The Consumer Credit Market can be confusing sometimes when it comes to deciding which type of Loan is best for your specific needs. It is indeed prudent for you to compare payday loans and lenders before applying. 

Let’s explore some of your options:

Secured and Unsecured Loans

These are typically Personal Loans that are generally provided by Banks and the larger Credit Houses.

The amount you can borrow varies from £1000 to £30000 although for Secured loans, it can be higher if you secure the loan against sufficient equity; your home for example.

These loans are mostly used for Home Improvements, Debt Consolidation and Motor Vehicle Purchases. They can also be used for small Businesses to meet start-up or expansion costs.

The duration of these loans is usually from 1 year to 5 years. Again, Secured loans are different to Unsecured in that they can be for far longer.

Interest rates vary too and are highly dependent upon an Applicants Credit Score with the Credit Reference Agencies. A poor credit history will inevitably mean more expensive loans or declines.

Short Term Loans and Payday Loans

These loans are exactly as they are named; they are strictly Short Term. Generally they are from 1 week to 12 months with the Short Term Loan Payday alternatives being from 3 months to 12 months while the loans aimed at covering an immediate small expense being from 1 week to 1 month.

The interest rates for these loans are capped by the Financial Conduct Authority at 0.8% per day. It should be noted however that the Annual Representative APR’s used to describe the cost of this type of loan is very high but it must be read in the context that the loan will not be repaid over a year but over a far shorter period.

Unlike Unsecured and Secured Loans, these loans can be acquired by Applicants with a poor credit history. They are also quick to obtain if approved and noted for their convenience; indeed instant decision payday loans are very popular. 

Don't be fooled by their easy nature however and take them lightly; these are loans that need to be repaid as fast as possible. They are not for bridging or consolidation. The interest for this type of borrowing is not high if you repay quickly but will be very high if you do not repay in accordance with your credit agreement. 

Always ensure you are 100% certain that you will be receiving the necessary funding to meet your borrowing commitments prior to taking out any loans. This will keep costs and fees low and also improve your credit rating. 

Personal Borrowing 

Now that you are familiar with the definition between Secured/Unsecured Loans and Short Term/Payday Loans, you can confidently explore all the lenders and find the personal borrowing that you require. 

Obviously, we want your business and would love you to apply with us. We feel that we will be your best bet for what you need. Helpful, trustworthy, friendly Staff are on call to answer your every question, 24 hours a day, 7 days a week. 

In a highly competitive market, stands head and shoulders above our competition. Our excellent reputation has been built over a proven work ethic and time honoured excellence. 

When it comes to lending money for any reason, we are the best. Period. 

We know Personal Loans.