Unsecured personal loans are repayable on a monthly basis at a fixed amount. They are not linked to any underlying security, such as your home, hence the use of the term unsecured.

Personal loans are offered by lending institutions such as banks and building societies and are available in a variety of formats, each of which may differ in the possible size, term and purpose of the loan.

The maximum loan value and length of time over which the debt is repaid will not be the same for car loans as for payday loans, for instance.

The amount borrowed usually varies from £500 upwards and is usually repayable over a period of between 6 months and 10 years. Lenders charge interest rates on the amount borrowed. Their rates can either be fixed or variable. If the rate is variable, the rate changes with market forces and could change the amount you repay. Fixed rates offer more certainty but can be at a higher rate. As a general guide, it is advisable to compare the Annual Percentage Rate, (APR) of different lenders.

Personal loans are repayable on a monthly basis at a fixed amount. However, some lenders offer the option of over-payments or under-payments that could assist you depending on your current personal circumstances.

Unsecured loans can be difficult to obtain, particularly for those with an impaired credit history, who will be forced to pay a fairly high rate of interest if any willing lender can be found.