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There are 2 main types of loan. These are Secured and Unsecured, and you can probably guess the difference between each from their names! But maybe not! The idea of a secured loan is that you put up an asset/capital as security, so that if you default on your payments, the lender can claim your asset to pay off your debt to them. The asset that is usually used as security in this instance is your home, which is why this type of personal loan is often referred to as a homeowner loan. Benefits of this type of loan? Well they are often easier to arrange and you can generally borrow larger sums of money, due to the lender having some form of security.

Right, with that one out of the way, let’s look at unsecured personal loans. This is where names can be deceptive, because no this type of loan is not secured against your assets such as your home, but being realistic it does not mean that a lender would not pursue you for their money, should you be able to keep up the repayments of this type of loan. The lender would be within their rights to pursue any debt through the civil procedures, which could ultimately result in your home being at risk.