Whether you’re a homeowner or a tenant, you can apply for unsecured homeowner loans in the UK. Unsecured homeowner loans are essentially personal loans that enable you to split the cost of your expense into affordable monthly instalments, without pledging your assets (such as your home) as collateral.

Whether you’re looking to start a home improvement project, pay for unplanned medical expenses, consolidate your debt, or simply to purchase a new car, unsecured homeowner loans can help you tide over any financial crunch. Besides, the fact that these loans don’t pose a risk to your property ensures your peace of mind.

With LoanTube, you can borrow between £1,000 and £35,000, and repay the sum through convenient and systematic instalments each month over 3-7 years. Compare unsecured homeowner loans with real interest rates, at the tap of a button from anywhere in the UK. Experience a hassle-free and transparent borrowing experience with LoanTube.

Unsecured homeowner loans are easier to access than secured homeowner loans simply because the former does not require you to put up your assets as security against the loan. However, unsecured personal loans also have several pre-requisites that you must fulfil to secure the loan.

One of these factors influencing your application is your credit score. Your credit score is a key parameter because it gives lenders an insight into your relationship with credit. Demonstrating a healthy repayment pattern and responsible credit behaviour strengthens your credit score.

A higher credit score increases your chances of getting low-interest credit. With a stellar credit score, you will be able to compete for the lowest interest rates in the market. When you apply for unsecured homeowner loans, lenders will assess your credit score, Income, and debt-to-income ratio, among other factors.

Once your application gets approved, the lender would typically transfer the lump sum into your bank account. You can then use the money at your convenience, albeit responsibly. Missing repayments can be detrimental to your credit score, risking your chances of securing credit in the future.

Please note that you will experience a minor drop in your credit score when you undergo a credit check during your application. However, the impact of this drop diminishes over time.

When comparing loans, it is crucial to take the following into account:

• Compare the interest rates: Opt for a loan that offers the lowest interest rate from the options available to you.
• Compare the APRs: APR (Annual Percentage Rate) gives you the overall cost of the loan. Aside from the interest rate, this includes the overhead charges associated with it – early repayment fee, arrangement fee, etc. Choose the offer with the lowest APR.
• Compare the ease of application: You could go for online solutions with a quick application process and ease of access, such as LoanTube. 
• Compare the processing speed: Choose a platform that provides fast processing and instantaneous decisions. 
• Compare the loan term: Find an offer that aligns with your repayment ability. 
• Compare the borrowing limit: Check the borrowing limit of potential lenders before applying with them. Some may not lend up to the amount you’re looking to borrow.

Just like any other loan, your credit score is heavily influenced by how responsibly you use and repay your unsecured homeowner loan. As you keep making timely repayments towards your loan, you will witness gradual improvements in your credit score.

Missing repayments on your loan can take away quite a few points from your credit score. Besides, suppose you consistently miss repayments and default on your loan. In that case, the lender may get a County Court Judgement (CCJ) issued against you.

A CCJ could stay on your credit report for up to 6 years, severely affecting your chances of securing credit in the future. Thus, to prevent risking the security of your financial future, you must maintain a healthy relationship with credit.

Unsecured homeowner loans can solve a multitude of purposes for you. Here are some of the most common reasons why people opt for an unsecured homeowner loan:

• To consolidate high-interest debt. 
• To purchase a new car. 
• To finance a minor home improvement project. 
• To pay for unprecedented emergencies (medical or otherwise). 
• To use as a deposit for investing in a property. 

Different CRAs or Credit Reference Agencies use different credit scoring models, meaning that you’ll have a separate score for each agency. For instance, Equifax’s ‘excellent’ score will typically be about 475. However, according to Experian, a credit score of 700 or above is considered ‘good,’ and 800 or above is considered ‘excellent.’ Similarly, a score of 628-710 is considered ‘excellent’ in TransUnion.

To qualify for competitive interest rates, you should aim for a higher credit score – anything that’s ‘good’ or ‘excellent.’ 

Here’s what you should consider before opting for an unsecured homeowner loan:

Is this a suitable loan amount for me?

Assess your affordability before applying for an unsecured homeowner loan. Ensure that your financial circumstances will allow you to stay committed to the loan. 

Will I be able to commit to the loan term? 

Loans with a longer repayment term require more commitment. Determine a convenient loan term by analysing your finances and circumstances. A more extended period may mean smaller monthly payments and a greater accrued interest – iron out the finer details.

What happens if I miss a repayment?

Missing a payment can cost you a few points off your credit score. Defaulting on the loan could result in a CCJ, which could impact your financial records for up to 6 years. Moreover, a negative record such as this can make it challenging for you to apply for credit in the future. Therefore, it is best to address any challenges you might face in repaying the loan. 

How much interest will I have to pay?

Compare the interest rates and APRs to find an offer that costs you the lowest. You pay interest monthly, so make sure you opt for a loan term and offer that aligns with your current and future financial capabilities.