The amount you want to borrow and the value of possessions you own are the fundamental aspects which will help determine your answer. A secured loan lets you take out a loan with a low fixed rate using your possessions as collateral, if you fail to keep up with payments your possessions will be sold to pay off the loan. An unsecured loan lets you borrow an amount with no collateral needed; these will usually have higher interest rates.

You are unlikely to get an unsecured loan for an amount over £25,000 as the loan providers will struggle to obtain that amount back off you if you fail to keep up with payments. In most situations, an unsecured loan would be the better option as you do not have to commit any collateral against your loan. If you fail to keep up with the payments with an unsecured loan you still might be eligible to have your possessions repossessed.

In some cases you might be better off re mortgaging your property as you will pay lower rates as you would with an unsecured loan. If you have recently renewed your mortgage you might have to pay a penalty fee for re mortgaging so soon, in this case you will be better off taking out a 2nd mortgage on your property, this again will have lower rates than an unsecured loan.

If you only need to borrow a small amount of money you should look at taking out a payday loan. These will usually be under £1,000 and gives you 31 days to pay it back (usually on payday) in one go. The interest rate is normally around 25%.

So if you need to borrow under £1,000 you should look to use a payday loan. If you are borrowing anything from £1,000 - £25,000, you should look at an unsecured loanand anything over £25,000 you are best taking out a secured loan. You should seek financial advice before making your decision.