Unsecured Lending

An unsecured loan provides a lump sum purely on the basis of the borrower’s creditworthiness. It is not linked to, or secured against, a tangible asset. A borrower may use it for any purpose they see fit, such as loan consolidation, home improvements or a holiday.

Examples of the different ways in which unsecured lending may be packaged include bank overdrafts, store cards and credit cards. 

There are, of course, greater risks for lenders in the event of a finance agreement falling into arrears. For this reason, interest rates tend to be higher than with secured lending.