What is an unsecured personal loan? Well put quite simply, it’s whatever you want it to be, a personal loan can be used for anything you want. Once you’ve negotiated the murky waters of choosing the best deal for you, you can spend the money on whatever you chose. The most common reasons for taking out a personal loan are home improvements, car purchases or debt consolidation, but people can and do take out personal loans for almost anything. Lloyds TSB released information on some of the more unusual reasons for a personal loan in March and these included a suit of armour, a dowry payment and a camel!

More seriously however, an unsecured personal loan offers consumers a great deal of flexibility and not only in what they spend the money on. Since it's not secured on your property both homeowners and tenants are eligible and unsecured loans can be arranged more speedily than a secured loan where you may have to wait to have your collateral approved. Personal loans are agreed at a set rate of interest, for a set period and a set amount. This means that there is no temptation to borrow more, as with a credit card, and you can budget effectively to manage the repayments.

The loan market is expanding rapidly and nowadays it's not only banks and building societies that offer personal loans. Supermarkets, the Post Office and Internet Finance companies all over competitive loans in addition to the more traditional high street banks and building societies. Most loan companies will offer their services via call centres and the Internet as well as in person so researching who has the best deal for you couldn't be more convenient, although with so many different companies competing there's a lot of comparison shopping to do!