When you're looking for a loan, one of the first issues you'll need to decide is whether it should be secured or unsecured. The decision is seldom straightforward so here are a few pointers.

Before we start, it's important for you to understand the difference between the two sorts of loan.

With secured loans, you agree to allow the lender to register a legal charge on your property at the Land Registry. As most homeowners already have a mortgage that's secured by a first charge on your home, the loan company has to agree to take a charge that ranks behind the first charge. Then, if you sold your house, your solicitor would firstly repay your outstanding mortgage and then the remainder is used to repay the second charge (and any other registered charges). Only when the solicitor has repaid all the registered charges, do you receive the rest of the sale proceeds.

The most important point you have to understand about any secured borrowing, is that if you default on the repayments, then the lender will automatically have the right to apply to the Courts to repossess your home and sell it to recover the money they are owed. Therefore, you need to carefully consider the matter before you agree to such a charge. If you are in any doubt, consult your solicitor or financial adviser.

Unsecured loans are different. You don't provide any security to the lender. As such, the lender views the loan as a more risky venture as the lender has no automatic route to get back what it is owed.

Therefore you'll appreciate, that if you're not a homeowner you don't have to decide between a secured or unsecured loan. As you have no property to secure the loan, you can only apply for an unsecured loan.

Unsecured loans are normally available from