There are several factors to consider before applying for unsecured loans. These loans are doubtless the most widely available and used loans in the financial market. Their popularity has more to do with the lack of collateral. With the absence of collateral, people deem unsecured loans as less of a risk than secured loans.

With unsecured loans, the threat of the borrower losing his asset, in case he misses the repayments, is absent. With the greater risk to the lender in this regard, the interest rates are predictably hiked. However, the absence of collateral is no loophole for the borrower to exploit. Lenders palpably do not let go of their money easily. The court is always an alternative. In fact, lenders avail what is known as the Charging Order. Should the court rule in his favour the borrower is forced to put up an asset as collateral. The same can be sold off by the lender to recoup the amount.

Before applying for an unsecured loan in the UK, there are some factors to look at. APR’s are the most feasible way for loan comparison. Lower the APR, the “cheaper” the loan.

Borrowers should keep in mind that the loan quotes that are advertised on visual, print and other forms of media are not fixed rates. They are in fact typical rates. In other words, they are liable to change, as per the borrower’s credit records and financial standing.