Levels of unsecured lending in the UK currently stand at 0.2 trillion. Unsecured loans are a convenient, highly regulated way to borrow money. The problem is that borrowing money has been too convenient. This has resulted in high levels of personal debt, creditor harassment, loan defaults and bad credit for millions of struggling borrowers.

Many borrow in order to consolidate debt, such as smaller unsecured loans, personal overdrafts and credit card debt. Others do so because they don't want to wait any longer before making a purchase. Whilst unsecured loans are a practical solution for many families, others may wish to think carefully before adding to household bills and expenses.

Unsecured Loans and Home Improvements

In a rising market, taking out an unsecured loan for home improvements can be a smart move. For example, a new kitchen or double glazing can add thousands to the value of a property. However, taking out an unsecured loan in a falling property market is unlikely to add value, especially for those already struggling with negative equity.