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. More info
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. Less
They are not secured against any of your valuable assets. Tenant loans do not require you to offer up anything as collateral, such as your home (since you rent your home), so you're under no risk of losing your home if you are unable to make repayments.
Your interest rate will be higher than if it were secured. Because your lender has no security that you'll repay your loan, your interest rate will be higher than if you were able to secure the loan with some type of collateral.
They are meant to be a short term financing option. Tenant loans are best for short term financing for expenses like holidays, a wedding, or small home improvements.
Think carefully before securing debts against your home. If you do not keep up repayments your home may be repossessed.
Tenant Loan Basics
Shopping for a Tenant Loan
Secured Loan Advantages