# What is the difference between secured and unsecured loans?

> Quick answer · Last updated 5 July 2026

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## In short

Unsecured loans need no collateral — typical £1,000–£25,000. Secured loans use property as security — failure to pay can lead to repossession after court process.

Unsecured rates price on credit score and affordability.

Secured homeowner loans may offer larger sums but carry property risk.

Regulated loans cap early settlement charges — check before overpaying.

See compare personal loans guide.

## Related

- [Compare personal loans](https://moneyguide.org.uk/credit/compare-personal-loans-guide/)
- [Personal loan eligibility](https://moneyguide.org.uk/credit/personal-loan-eligibility-explained/)

## Primary source

fca.org.uk/consumers/loans

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Money Guide is not a financial adviser and does not currently earn commission on credit cards. This guide is educational information only — always check the issuer's own terms, eligibility checkers and fees before applying. 18+, subject to status. Credit is a commitment: only borrow what you can repay in full each month, because interest charges erase every reward on this page.