An unsecured loan can be used for any purpose, and you will agree a fixed amount to borrow and a repayment period with the lender. The interest rate will vary from lender to lender, and you will make payments in regular installments. Unsecured loans are typically taken out for shorter time periods and for smaller amounts, so this could be a better option for you if you are keen to not be in debt for a long period of time.
As there are no assets that the lender can use as security, the lender will base their decision on whether to approve your unsecured loan on your previous credit history. Therefore, a credit check will be carried out upon application to determine your credit rating, or ‘safeness’ as a borrower. It is important to establish with the lender before going ahead whether there are any penalties for early repayment of an unsecured loan, and also whether an application fee will be charged regardless of whether your loan application is successful.