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What is an unsecured loan?
An unsecured loan – also known as a personal loan - is where you borrow money without having to provide security against it such as your home or car. Unsecured loans are suitable when you want to borrow a smaller amount of money.With an unsecured loan, interest rates tend to be a bit higher than if you borrowed the money as a secured loan. This is because, with a secured loan, the lender has less of a risk of getting the money back should you default on payments.
What is an unsecured lender?
An unsecured lender is a company that provides a loan without asking for some form of security (such as your home or car). Unsecured loans can be quicker to arrange but will cost more in interest than a secured loan.This is because the unsecured lender is taking a greater risk as should you default on loan repayments, the lender cannot seize your assets in order to get repayment.
What is an early redemption penalty?
An early redemption penalty is a financial penalty that you have to pay should you settle lending such as a loan or mortgage early. When looking for credit, it makes sense to check out the early redemption clause. That way you can see how much you could be liable for should you decide to pay off the borrowing before the end of the agreed term.
What is Equifax?
Equifax is one of the major credit referencing agencies in the UK. Equifax pulls together all your credit data from various sources to create a report that shows your personal credit history – ie your credit file. When you apply for credit, lenders will check your credit file to see your financial history. You can request a copy of your report at any time to check that all is in order. The Equifax website has lots of useful information on making credit decisions and protecting yourself from fraud.
What is a default?
A default is the term used to describe where you have failed to meet your contractual obligations. If you have missed a payment on a mail order account, for example, they may place a Notice of Default on to your credit record.This will reflect badly on your credit file in the future should you wish to apply for further borrowing.