What is the difference between a secured and unsecured loan?

A secured loan is one that is tied to your house - which means that the lender has a right to take the home off you if you don't pay off the loan as you initially agreed. The rates of interest on a secured loan are normally lower because the lender is taking on less risk.

Unsecured loans are not tied into anything, but if you default on your repayments you could end up being credit blacklisted. This could prevent you taking out new credit cards, a mortgage or even taking advantage of an interest-free deal in a shop.