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What is an unsecured loan?

What is an Unsecured Loan?

A secured loan is a loan that is secured against an asset, such as a property. These loans are typically much larger, which is why they need to be secured against something with a high value. Unsecured loans are also called personal loans and often have higher interest rates. This is due to the fact that there is more risk in lending the money - there is no security for the lender like there is with a secured loan.

Unsecured credit includes bank loans, credit cards and short-term loans. There are benefits with each of these options, as well as restrictions. Bank loans are generally less flexible than other loans, as banks won’t typically lend less than £1000, to be repaid over a year or more. You could end up paying more in interest if you borrow for longer than necessary, or more than you need. You’ll also need good credit to take out a bank or building society loan.

If you are looking into credit card options, you can find more information on the Money Saving Expert website. Like a bank loan, you’ll need to have a good credit history to take out a low-interest credit card. If you have bad credit, the credit cards you may be eligible for will likely charge much more in interest.

Short term loans are available to those with poor credit, though the interest rates can be slightly higher. There is more flexibility, however, as you can choose the amount you need and the length of time you need it. You won’t end up paying far more in interest because of restrictions in loan duration. Unlike with some bank loans, short-term lenders won’t charge you for making early payments, so you can save money in interest if you can pay early. Paying loans back early or on time can also improve your credit rating.

My Financial Loan Broker can help you find an unsecured loan of up to £5000. We’ll find the best lender from our panel of trusted direct lenders, to get you the best possible rate.

Why Might You Need an Unsecured Loan?

If an emergency arises, you may not have the money saved to cover the cost. In some situations, like a leaking roof or a broken fridge, you can’t wait until payday to pay for the repair or replacement.

For these types of cost, you probably won’t need to take out a large bank loan: you may be able to borrow up to £50,000 with an unsecured bank loan. Through My Financial Loan Broker, you may be able to borrow between £500 and £5000 for those expenses where you need the money quickly.

Unsecured loans are not intended to be used for long-term financial issues, like loss of employment. Without a regular income, there is no guarantee that the repayments will be made on time, so you could end up paying back more in the long run.

If you are looking to take out a loan to pay for other types of credit, this is also not the best option. You may end up borrowing more and more over time. Entering into a debt spiral can be dangerous: if you think you may need to speak to someone about your debts, you can contact companies like Step Change for free.

Borrowing is not generally the best option if you are able to wait to buy something, after saving for it. Taking out a loan means that you’ll be paying back interest, whereas saving won’t cost you any interest. It can be helpful to complete a budget sheet to work out areas in which you can save money.

How Much Can You Borrow?

My Financial Loan Broker can help you find loans between five hundred pounds and five thousand pounds. You can choose to repay over up to five years. We won’t try to tempt you to borrow more so you pay more in interest - it’s completely up to you how much you borrow and for how long. Unlike some brokers, we also won’t charge you a fee for our services.

We’ll try to find the best loan for you, with low-interest rates. You can also save money by making early payments: the lenders we work with won’t charge you for doing this.

Can You Take Out a Short Term Loan with Bad Credit?

You may not know what your credit score is like: you can check this for free through sites like Noddle. If you have a low score, finding a loan can be a bit more tricky, as a lot of banks or credit card companies won’t be willing to lend to you.

Short-term unsecured loans are often the best option for those with poor credit histories. Even if you are able to take out a credit card, the interest rates are typically higher, and it can be more difficult to budget for the repayments, as they aren’t regular.

We only work with responsible lenders, so they will conduct credit checks, but your credit file won’t be the only thing looked at. Your more recent credit history will also be used to make a loan decision rather than transactions that happened years ago.

Even if you don’t have a perfect credit history, My Financial Loan Broker will try to match you with a lender. You may be able to take out loans of up to £5000.

How Can My Financial Loan Broker Help?

If you have had an unexpected expense, and are looking to borrow between £500 and £5000, you could be able to find the perfect lender through My Financial Loan Broker.

Rather than fill in endless forms with various lenders, simply complete our short form, so that we can do the hard work for you. We’ll do our best to find you an unsecured loan, and if approved by a direct lender, you could have the money in your bank within an hour.

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My Financial Loan Broker
My Financial Loan Broker does not lend money and is not a lender. The service we provide to our customers involves passing their applications for payday and short-term loans on to appropriate lenders or other brokers in our affiliate lending network, who then make approval decisions and offer loans to those customers. Nothing stated on the My Financial Loan Broker website should be construed as a lending offer. We are neither lenders nor agents or authorised representatives of any lender. We do not endorse, promote, or otherwise advertise any one lender in our network or any particular payday or short-term loan product. Approval of payday and short loan applications is determined by individual lenders, as are the loan terms offered. Lenders may not be able to approve you for the amount you request. Only qualified UK residents may apply, some residents may not qualify. Some applications will not be approved, and completion of an application form in no way assures approval. All times, amounts, rates, and other claims made on this website are for example and illustrative purposes only. Terms of each loan are unique and subject to the lender's discretion. My Financial Loan Broker is not informed about the specifics of loans arranged through our service and cannot help you with questions regarding your individual loan; you must contact your lender directly.Those people with long-term debt or income problems should not consider a payday loan to be a viable solution. Payday loans are for responsible individuals who are experiencing a one-time-only financial setback, not long-term financial issues. All loan applications are subject to credit approval. My Financial Loan Broker makes money through commissions on loans which are arranged through our services. These commissions are paid by our lending partners. Customers of My Financial Loan Broker are charged nothing for our services.Please note that although most people receive their loan funds within 1 hour, individual banks may require funds to be held for up to 3 days while the funds clear. For questions about this clearing hold, contact your bank.

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My Financial Loan Broker is a trading name of Leadtree Global Limited which is Authorised and regulated by the Financial Conduct Authority reference number 728649. Registered in England No. 08526321. Leadtree Global Limited, 28 Avenue Road, Bournemouth, Dorset, BH2 5SL. Registered with the Information Commissioner's Office No. ZA029756.
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