Financing can be involved in your life in different ways. For example, if you are going to invest in a large purchase such as a house or even a car. Large furniture purchases and credit cards all fall into these categories. Interest rates are most integral part of financing. Why else would a company want to loan you money or offer you credit? How else would they benefit? They benefit from interest that you have to pay in on financing your loan. There are different types of financing options available.

The percentage rate is amount of interest that you pay. The percentage rate is certain portion of your loan or credit that you pay back in interest. For example, if your loan was for $40,000 and your interest rate was 12.3% then you would pay 12.3% of $40,000 in interest. The interest would be added onto your $40,000 and you would pay it back via your monthly payments.

As loan is not secured against any of your assets you do need to have a positive credit history in order to qualify for an unsecured personal loan.

People who use unsecured loans are generally those who are not in a position to offer to collateral for example, people who don't own a home or have a poor credit history, County court judgements, mortgage arrears or debt problems.

Providers of secured loans will only supply someone with a loan if they have adequate collateral to secure loan. An unsecured loan provider does not require an individual to have any collateral, this loan is ideal for people who rent their homes.

Although you aren't required to offer your home as collateral, it is worth highlighting that many a loan company still require you to be a home owner in order to be eligible to apply for an unsecured loan.

The benefit of an unsecured loan is that you do not need to own your home to qualify for a loan. You will typically be able to borrow between £1,000 and £10,000.