What are the different ways of borrowing money?
The types of loan available depend on the amount you want to borrow, your personal circumstances and the state of the financial market (not great at the time of writing this article!). This section therefore only gives a broad description of the type of borrowing available. Personal Unsecured Loans Probably the mainstay of loans is the personal unsecured loan. As it name suggests, a personal unsecured loan is money that you borrow from a bank or building society. As part of the loan agreement you agree to repay the principal of the loan (the amount borrowed) plus interest (the lender’s profit). In most cases you’ll agree to repay the loan in equal [monthly] repayments. However, you do not agree to provide any security (or collateral), in the case that you default on your repayment. The upside of an unsecured loan is that the lender cannot repossess the item that you have bought with the proceeds of the loan, nor can they enforce against any of your other assets. The downside of an unse
