What’s a secured personal loan?

With a secured loan, you use a possession as security – so if you can’t pay the money back, the lender can have that possession. The most common type of secured loan is a mortgage, where people use their home as security. The sums involved are usually higher with secured loans than unsecured, simply because the lender knows they can take your home, and sell it, if they need to.

Secured personal loans usually come with greater financial risk if you default on your payments, however the APR for secured loans may also be lower than for unsecured loans.

What’s an unsecured personal loan?

An unsecured personal loan lets you borrow without having to put anything up as security. You just need to show you can afford to pay back the money.

Unsecured loans are typically for smaller amounts than secured loans and can be used for one-off payments, if you take out a loan with Post Office, of between £1,000 and £25,000. When you take out an unsecured personal loan, you will perform a credit check which will determine your eligibility for the loan as well as your APR.

Why get an unsecured personal loan?

  • Home improvement loan

    You could get an unsecured loan to make home improvements, whether these are necessary changes, extensions, decorative renovations or to increase the value of your house. We’ve got a guide to getting a home improvement loan that might help you decide whether it’s the right course of action for you.

  • Buying a car

    Unsecured personal loans are typically between £1,000 and £25,000 – so the ideal amount if you’re looking to replace or upgrade your wheels. There are a number of option for paying for a car if you’re buying one, including car finance, so we’ve put together a guide to help you choose which is best for you.

  • Buying a holiday

    Sometimes we need to get away and take some R&R. But paying for your whole holiday – particularly if it’s a big one – out of your savings or income can be challenging. A personal loan can help you spread the cost of your holiday while paying for it in one go.

  • Debt consolidation loans

    If you have debt with multiple creditors then an unsecured personal loan can help you bring this under one roof and pay a single creditor back each month – your loan provider. Managing debt can be a complicated process so it’s important to ensure you know the implications of this type of borrowing before taking out a personal loan.

How can I take out an unsecured personal loan?

With Post Office, you can take out a personal loan by applying online. And once your loan has been approved, you can get on with the activities you took the loan out for in the first place.