Loans FAQ
What are unsecured loans?
These are loans which is not secured against the assets of the borrower. The lender has no specific rights to the assets of the borrower if the loan repayments are defaulted upon.
However, if the borrower does default, the lender may sue for repayment, which may in the end mean that the borrower must sell assets in order to repay the loan.
Because the lender has no security, the interest rate (APR) charged will almost certainly be higher than for secured loans, but unsecured loans are sometimes the only option available - eg for tenants, those living with parents etc
