Secured loans are secured on your property. The lender will register a second charge behind your mortgage lender on the land registry. That way should the loan repayments not be made and repossession takes place the secured lender will have second rights to reclaim their losses from the sale of the property.

Unsecured loans are otherwise referred to as personal loans and have no direct claim on your property.

Which one is the best?

You need to look at your situation and search the market for the best loan for you. With an unsecured loan the lender will asses the risk of lending you money purely on your credit history and personal circumstances for example how long you have been in your job and if your income can be proved. With a secured loan the equity in your property can also be taken into account.

You may therefore have a poor credit rating but be able to offer the equity in your property as security to lessen the risk for the lender of them not being able to get their money back. Therefore in this situation you would be more likely to be approved for a secured loan. As you can see it all depends on your personal circumstances. You need to assess your circumstances and speak to lenders about how you would stand in being accepted.

It is important to search for the most suitable and competitive loan that you and your circumstances will be accepted for. Don't simply browse headline rates advertised on the internet and in the press. Often the rates advertised are only available for a small percentage of the population who are extremely low risk. The best option is to speak to an expert in this field. Tell them that you need to know the best rate and product that is suitable and that you will be accepted for. This will give you a realistic idea of what is out there for you.