There are still a lot websites out there which will tell you that getting hold of an unsecured loan even if you have an absolutely awful credit record is really easy and extremely cheap provided of course that you apply through them! Sadly, they are either way out of date or telling you a pack of porky pies in order to sell you something else, like a debt management scheme or IVA. This is not to say that unsecured loans are no longer available however, far from it, but thankfully the lunatic days when banks and even the hitherto staid and cautious building societies were dishing out huge loans to people who really didn't have a hope of ever repaying them are over. A great number of the institutions that used to give out these loans have now ceased to do so, partly because defaults have brought them to their financial knees, and partly because they simply do not have the funds to lend out in the first place. The companies that are still lending out unsecured loans are mainly the more careful and sensible institutions which have traditionally taken a long-term view of lending and which have confined it within sensible bounds.
You will find, then, that unsecured loans at very reasonable rates are still available to clients who have an excellent credit record and who can show that they can afford to repay these loans comfortably. Where does that leave those with a poor credit record? Well, there are still lenders who have a long experience of advancing money to people with poor credit ratings but these are realistic business people who know that there will always be a certain percentage, and sometimes a high percentage of their clients who will default. In order to stay in business and continue to make the profits that are necessary to ensure the continuation of the business they therefore have to charge interest rates which can be somewhat on the high side to say the least. One company, Provident Financial, have a network of collectors to deliver loans to their clients and who collect the repayment is afterwards; this has the advantage of the personal touch but obviously the collectors have to be paid so this is reflected in the charges.
It is surprising how many people who are able to offer security still apply for unsecured loans, and it is possible in many cases that they feel that they are safer by not putting their homes up for security in case they ever fall upon hard times and are unable to repay the loan. This in most cases is a fallacy however because if a borrower defaults on a loan many lenders will check up on whether or not that person has an interest in a property, and will then ask a court to secure the loan against that property. The loan is then turned from an unsecured loan into a secured one, but whereas the interest rates charged on secured loans are usually much lower, the borrower would still be expected to make repayments at the much higher unsecured rate. If you are considering taking out a loan therefore, and you own some property, you may well find it cheaper in the long term to look for a secured one particularly if the sum that you wish to borrow is substantial.