We offer a UK alternative to unsecured loans
Looking for the best unsecured loan in the UK? Find out how SafetyNet Credit’s smart new credit facility could help. Learn more now.
for up to 40 days (292% per annum, variable)
What is an unsecured loan?
It appears you are searching for unsecured loans in the UK. Here at SafetyNet Credit we think it’s important everyone is able to make informed decisions when it comes to their financial affairs, so we created this page to give you some information about the topic, as well as a chance for you to read about what our own consumer credit solution entails.
So, what is an unsecured loan? A good way to get an understanding of unsecured loans would be to first look to their opposite: secured loans. A secured loan is a type of loan whereby the debt is ‘secured’ against an asset or assets. With a secured loan the idea is that if you fail to meet the agreed repayments, the loan contract gives the lender a legal right to take possession of whatever assets the loan was secured with, and to then sell them to cover the unpaid cost of the loan. In this sense the aim of a secured loan from the perspective of the lender is to reduce the risk associated with lending.
There are some different forms which a secured loan can take. An example would be ‘logbook loans’, which are secured against a borrower’s vehicle. Here when you first take out the loan you would hand over the logbook which proves ownership of your car to the lender until the loan is repaid. One of the most common forms of secured loan however is the homeowner loan, where the value of the loan is backed by the equity in your property.
Now that you have an idea of what a secured loan is, understanding unsecured loans should not be too difficult. They are quite simply a form of personal loan where securing the loan with valuable assets is not a part of the loan agreement.
Unsecured loans: things to consider
As with any kind of loan there are a range of different factors to think about before making a decision. One important thing when it comes to unsecured loans is to check whether you are eligible for the loan you would like to apply for. With unsecured loans your credit rating will be an important factor determining if your application is successful, so it is a good idea to investigate this beforehand.
Another thing to consider is whether the amounts on offer with unsecured personal loans are right for you, and if there might be other options available. Unsecured loan offers tend to start around £1,000 or more, so if you are looking for smaller amounts then it is definitely worth looking into alternative forms of unsecured credit which may be better suited to your situation. One thing you want to avoid with any form of borrowing is taking out more than is necessary, as you do not want to be paying interest on money you had no need for.
Unsecured loan alternative with SafetyNet Credit
Here at SafetyNet Credit we do not offer traditional personal loans. We are something known as a revolving credit facility, which can be ideal for someone looking for an unsecured loan, but who only requires a smaller amount. Successful applicants are given access to a credit limit based on what they can afford of £50 to £500 (and up to £1,000 for trusted existing customers). Any time you find yourself in need of funds you can make a transfer from your credit account, which is repaid when you next receive your wages at a rate of 0.8% interest per day, capped at 40 days. There are no other costs for using our service. Another feature of SafetyNet Credit is ‘auto-deposits’. This allows you to set a balance level at which an automatic transfer will occur, in order to help those who may be at risk of falling into an unauthorised overdraft without realising and incurring unplanned borrowing fees from their bank as a result.
We can be considered an unsecured form of credit in the sense that we do not require you to secure your borrowing against any assets (though there may be questions in the application form about things like your property to help us get a sense of your financial situation).
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