Healthcare:- Whatever the economic climate, you can be sure that people will continue to get ill and need medical treatment. This means jobs not only for doctors and nurses, but also administrative and accounting positions (particularly in America with the proposed reforms). We are also living longer, meaning that there is a greater demand for care assistants in nursing homes, and similarly for those with mental illnesses. This also has a knock-on effect on the pharmaceutical industry, in developing and supplying drugs. Finally, as unhappy a thought as it may be, people do not stop dying just because the economy is in turmoil – thus funeral directors and morticians are still necessary.

Energy:- As an increasing number of countries attempt to both ‘go green’ and save money, the need for energy-efficiency specialists grows. Those involved in developing renewable energy sources e.g. wind farms are in demand now, and will continue to be so in the future. This encompasses environmental scientists, mathematicians, and engineers for construction purposes. In the meantime, we still rely on oil and gas, meaning workers in this industry will continue to find employment at all levels.

Education:- Young people will always need to be educated, so teaching provides a fairly consistent career path. There is currently a shortage of maths and science teachers, and a demand for male teachers, particularly at elementary school level. Teachers with a second language are also becoming increasingly important. Because of the recession, there are a growing number of adults returning to education following redundancy, or to retrain in a new profession, and they too require tutelage. On a related note, there is also a constant need for social workers.

Financial Services:- Despite the failures within the banking system itself and some major losses amongst the financial giants, there is still a call for those who can provide financial services in the form of actuaries and advisors - accountants, investment consultants and credit controllers etcetera. These professionals are needed by companies looking to keep their expenditures and investments under control. Private citizens too may turn to accountants and consultants in order to ensure they are getting the best deal from their personal finances and pension plans.

Security:- During a recession, there may well be an increase in levels of crime as some people become ever more desperate to make ends meet. Law enforcement services, then, will offer a high level of job security during in this time, and could potentially require extra employees to bolster numbers.

International Business:- While the economic downturn is still affecting many countries, others are beginning to see the light. Much of Europe is now seemingly out of the recession, with other global powers such as Japan beginning to go the same way. So, companies dealing with international business may find that there is more job security. Individuals who are bi- or multi-lingual, or with knowledge of foreign markets and the means and motivation to potentially move overseas, may be very useful to this industry.

Military:- It is unfortunate to think that one might gain from the present political turmoil engulfing the world, but in purely practical terms, the current situation does mean that there is a constant need for troops. The army will also cover living expenses (including providing housing in the UK) and ensure families are supported.

Practical Skilled Services:- Basic services such as sewage maintenance, plumbing and water treatment among others continue to be vital. There may be less recruitment drives for new employees, but those already within those skilled services should see a fair level of job security. This really covers any industry that is necessary to the everyday running of a nation. We will always need food and clean water, drainage etcetera. Computer and technology skills are also important.

What you must bear in mind is that there is no real guarantee of security – rather, these are the industries that, globally, appear to be staying stronger than most in the face of the recession. You should consider your suitability for a given career, rather than simply undertaking it because it is ‘secure’. Teaching courses, for instance, are hugely oversubscribed because unemployed people are retraining merely because they believe it is recession proof. Following that, there has been an increase in new teachers quitting, because they cannot handle the stress. So simply bear these careers in mind – it may be worth those who have been made redundant, or new graduates considering following one of the above career paths – but only if it is right for you.

10 top job-saving techniques

1. For the good of the company. Think about the ways in which you can save the company money in your area of expertise. It may be that none of your ideas hit the spot exactly but as long as they are reasonable suggestions, your efforts will be noted and appreciated. Your company loyalty will be commended.

2. Think about it. If you want to take a holiday, think about your timing. Taking a long vacation in a time of crisis could look bad. Likewise, don’t be late or take extended lunch breaks regularly – these small bug-bears could add up to the perfect justification for getting rid of you over another employee.

3. Re-assert your presence. Get your contributions noticed without being pushy and keep putting forward ideas or sharing knowledge as a way to get noticed.

4. Go above and beyond. Put in the extra hours, beat the deadline, work the odd weekend if it’ll give you an advantage. Anything that suggests dedication to your job and the company will help in rocky times.

5. Morale-boost. Whatever your position in the company, you can help raise morale by either being positive and fun around the office or organising a cheap night out or suggesting everyone goes to lunch. Your positive energy will help make work more enjoyable and get you noticed and talked about. Just be careful of the work/social balance.

6. Update your skills. If you identify a weakness in your skill set, enrol yourself on a cheap course. It could be internet based, a day event or anything that doesn’t eat too much into your life or wallet but it will be seen as hugely proactive and relevant to your company. You’ll give yourself an immediate edge over other employees if you can fill that extra skills tick box.

7. Roll your sleeves up. Don’t undermine yourself but pitch in and help. Spreading yourself into other areas of work to help out a colleague can be seriously good PR. It will give the impression of a broader personal skill set and show you apart as someone who will go the extra mile.

8. Apple-polish. Yes, if there was ever a time to do a bit of ground-work with your boss, now’s the time. That doesn’t mean, walk around with your nose firmly attached to his or her backside but subtle ‘try-hard’ vibes won’t do you any harm.

9. Avoid office politics. There will be a lot of gossip flying around if your company’s business looks at risk. It is important not to get involved in gossip and bad-mouthing at a time like this as employers aren’t blind and you never know when a colleague may throw you to the lions to save their bacon.

10. Keep in touch. Networking is a fundamental part of business. If you are well connected, your present employer will see the value in keeping you and it will make it ten times easier to get another job should the worst happen.

We’ve all done it; let out that little gasp on receipt of our monthly statement. Particularly at that £100 withdrawal at 2am in the morning when inebriated – you know, you just needed to make sure you had enough cash in case you got stuck or couldn’t re-buy a round. Unsurprisingly, the money got spent and the hangover is somewhere up to £100 worse than if you’d just left it at the £50 headache you’d already paid for. You vow not to do that again. The problem with the statement is that it is too late, your naughty withdrawal merges into all the other necessary withdrawals and you forgive yourself. Perhaps rightly so, you deserve it. However, what would you see if you had a ‘beer money’ section on a spreadsheet that you filled in weekly? I suspect a whole list of naughty ‘just in cases’ that are slowly but surely breaking your bank and prohibiting your ability to save. You may not let yourself off the hook quite so easily.

Monitor your spending

Rather than endure the post-statement gasp, it is far better to keep track of your outgoings as you spend. Start a spreadsheet where you can clearly see all of your basic outgoings; rent or mortgage, council tax, car insurance, weekly shop etc and categorise the additional expenditure into clear groups i.e. eating out, clothes, alcohol etc. By documenting your spending in black and white, it will not only highlight to you exactly where the easiest savings can be made but it will make you think twice before you purchase some of the surplus items you’ve become accustomed to. It might even encourage you not to take your credit card drinking with you!

1. Downsize. Do you really need the 2.0 litre engine? Or the family estate now the kids have left home? Consider your requirements and weigh up the cost saving a smaller car would have on tax, insurance, running and so on.

2. Keep your car for longer. The cost of new cars depreciates quickly and rises each year so trading every few years could see you out of pocket. Get a good car and keep it for around six or seven years to make a saving.

3. Watch out for dealer service contracts and extended warranties, they can cost more than anything you’ll purchase directly and are not always fully comprehensive. Servicing can often be done by a local garage for half the price the dealer charges so have a look around for reputable local mechanics too.

4. Change your insurer. Apathy will often stop us from switching our car insurance. Too many deals, too many agents. However with the comparison sites available these days, it is easy to find cheaper car insurance online. You could be surprised at how much you save.

5. Combine policies. You could save money by getting your home and contents insurance and car insurance through the same agent. They will often give discounts for multiple policies – just check they are the cheaper option before you go with them.

6. Go for the cheapest petrol station: If you don’t leave it too late to fill up, you can be more picky about the petrol station you use. You don’t have to go miles out of your way; that would be counterproductive, but consider whether there’s a cheaper station in your area. The accumulative savings do add up over the year. Websites like petrolprices.com are cropping up to make it easy for you to find your cheapest local station.

7. Walk once in a while! You may find you don’t need your car for all the trips you’re making. Factor in a little more time for short trips and use your legs instead. It’s better for you and will save you money in the long run.

8. Car pool. If there are a number of you going to the same office or event, take it in turns to drive and all of you will save on petrol and wear and tear.

9. Use petrol offers and loyalty schemes. Supermarket points for petrol schemes and so on are a great way to make your inevitable living costs work harder for you and give you a little something back.

10. Don’t fill your tank: A full tank of petrol will add weight to your car making it less economic to drive. You’ll need more power to maintain your desired speed, burning more fuel, more quickly.

11. Fill up at night! OK, bit of a red herring but you can save a few pence. When they’re cold, petrol pumps don’t register the volume of petrol released as accurately and you tend to get a bit extra for your money.
12. Don’t overfill. If you reach the click, you’re full. Don’t put anymore in as it will only overflow when you park on a hill or if it gets overly hot.

13. Don’t tick over. Starting the car in the morning to ‘warm it up for 10 minutes’ will waste valuable fuel for no reason. Your engine will warm up faster when you’re driving it and your fuel will be used towards your journey not wasted.

14. Check your tyres. Soft tyres are a key reason for underperformance in a car. It takes more fuel to power a car with low tyre pressure due to the resistance.

15. Stop revving. If you rev your car or put your foot down hard when you pull away or speed up, you will burn more fuel than a gradual acceleration.

16. Check your gear. If your engine is groaning, you’re sapping its power. Make sure you’re in the best gear for your speed and save that precious petrol.

17. Check for junk. If you have half your belongings in your car or a roof rack you never use, get rid of them. Anything that makes your car lighter will make your petrol go further.

18. Air con or plug-ins. Air con and gadgets like portable fridges (for that holiday trip!)etc use an incredible amount of fuel. Check whether you really need the air con on and save yourself some valuable pennies.

19. Regular oil changes. Changing the oil and oil filter can extend the life of your engine saving you money on potentially costly repairs.

20. Ignore premium gas. Premium petrol is not going to make a lot of difference to the running of your car. Unless you are an F1 driver or own a top-of-the-range sports car, save your money and go for the standard gas.

Set up a savings account.

Shop around and find an account that best suits your needs, and with a decent interest rate. Try to put money aside as often as possible. It doesn’t matter how much – just put in whatever spare money you have at the end of the week or month and it will soon add up. Better yet, if your finances are reasonably healthy, consider arranging a standing order from your main account so that a certain percentage of your paycheque goes straight into your savings account. This should remove some of the temptation to spend it because you won’t be able to get your hands on it first. And remember, this account should be purely for amassing money, not something to dip in to when you fancy a little luxury. Perhaps have a certain goal in mind – for instance, a new car or holiday, or even just paying off a bill – to keep you focused on saving.

Shop around for service providers.

Don’t just stick with the company providing your gas/electricity/phone/internet/insurance/mortgage out of familiarity. There are numerous providers to choose from, and you may not currently be getting the best deal. As the time comes to renew contracts, check around. Make use of comparison websites to find the provider that is best for you. As you can see, the list of facilities we make use of in our homes is extensive, and if you can save even a few pounds, euros or dollars on each, it will make a big difference to your bank balance.

Curb your spending; go easy on your credit cards and prioritise

This applies to both groceries and personal shopping for clothes, electronic goods etcetera. Before you go grocery shopping, make a list of what you really need and stick to it. It’s all too easy to wander the aisles and find your fancy taken by treat foods but a list should help you focus. Consider also switching from brand names to supermarket own-brands. There is not a huge amount of difference in the foods, and the quality is always improving, but there is a big difference in price. The same goes for clothes – avoid designer labels and buy from the high street instead. You could save even more by buying from low cost retailers such as Primark, or even supermarket clothing ranges. They tend to mimic fashion trends anyway so you won’t look out of place, but your wallet will be a lot healthier. Only but those things you really need – the latest mobile phone or that must-have dress may leave you drooling, but do you really need them? Shelve your pride and prioritise!

Think environmentally.

All the advice we are given in order to ‘go green’ also works as a means to saving money. Insulate your loft and get double-glazing for your windows – a one-off expense now that will save you money in the long run. Turn down your heating and air conditioning and put on or take off an extra layer respectively. Switch off your lights, televisions, and computers. You can even turn the cooker off a few minutes before your food is cooked because the residual heat will do the job, and save power. Don’t drive unless it is absolutely necessary, or car pool, to save fuel costs. All these little motions will shave money off your bills, saving you money while contributing to saving the planet.

If in doubt, look to the past.

We’ve all heard riffs on the ‘Back in my day…’ speech, but there is something to be said for following in the footsteps of our parents and grandparents. Recessions come and go, and yet people continue to survive them. Now, more and more people are turning to seemingly old-fashioned ideas that saw people through in the recent past. For instance, use a washing-line instead of a tumble dryer (easier said than done in some climates, granted). You could try growing your own vegetables, although this would take some time to yield money-saving results. If you have children, they can wear hand-me-downs. Clothes can be sewn or patched to enhance their lifespan. Use reusable towelling nappies for babies rather than expensive disposables. Try using home-made cleaning products (e.g. bicarbonate of soda on a wet cloth instead of a cream cleaner, or vinegar for cleaning glass and silver). These techniques may require something of a lifestyle adjustment, but all these simple changes really can make a difference to your finances.

The death of the 100% mortgage

100% mortgages were very popular amongst first-time buyers in the last couple of years, and the banks were very happy to lend up to five times someone’s salary. While it meant more people could get on the property ladder, it is clear in retrospect that this was a car crash waiting to happen and a major contributor to the latest recession. Now, the average deposit for first-time buyers is thought to be somewhere between the 20 and 30% figure, even capping 40% in order to secure the better deals. Result: falling house prices but no-one can get on the ladder due to the renewed and belated prudence of the lenders. It’s a tough time out there.

Mortgage traps – Introductory offers masking SVRs

For those who have weighed up the options and think they can afford a mortgage, there are a few key things to be mindful of. Obviously, the point of a mortgage is that you have to pay it back – so this is where all the lender deals come in; how much you pay back a month; How much time you spread your payments over, and so on. Whatever type of mortgage you’re looking at, and however good the interest rate or deal is from your lender, be sure you understand one key thing: the Standard Variable Rate (SVR). This is the standard rate that lenders will charge you outside of any offer they may be running. This is the rate you will pay once any introductory discounts are finished. The Standard Variable Rate is worked out by your lender based on the Bank of England’s base rate. Commonly, the lender’s SVR will be between two and four percent higher than the base rate but this will vary from lender to lender so you need to be mindful. The SVR will follow the peaks and troughs of the base rate so if the base rate is low, your mortgage repayments will be lower and, unfortunately, vice versa.

So when you’re wading through lender’s offers, make sure you are balancing the ultimate Standard Variable Rate, post offer, with the benefits gained by the introductory discount taking into account the tie-in period and any overhanging redemption penalties that may be associated to your deal.

Mortgage interest rates

In addition to the Standard Variable Rate mentioned above, where your repayments will fluctuate with the Bank of England’s base rate, you can choose from additional options such as:
Fixed rate mortgage: fixing your interest rate for a set period i.e. your rate does not fluctuate with the base rate which gives more security when the base rate exceeds your fixed rate but you don’t get the benefits if the base rate troughs. Terms are generally fixed in two to five year periods.

Discount mortgage rate: a variation of the SVR which gives you a discount for an agreed period of time on the lender’s SVR. Generally, the larger the deposit or house price, the larger the discount you will be eligible for. Your monthly payments will still fluctuate in line with the base rate but the discount will remain the same.

Capped interest rate mortgages: another SVR variation, where your interest rate is ‘capped’ so that it cannot rise above a certain percentage when the Bank of England’s base rate increases. The benefit being that you get the perks of the lower base rate but have the security of not being subjected to the higher rates.

Base rate tracker mortgages: this tracks the Bank of England’s base rate with a constant differential set by the lender, usually between 0.5% and 1% higher than the base rate. Base rate trackers are generally for a fixed term but can be for the whole mortgage period. You benefit from the Bank of England’s base rate lows but can suffer the highs repeatedly. The base rate percentage differential will be based on your homes ‘loan to value’ (LTV) i.e the size of the mortgage as a percentage of the value of the property. Low LTVs will get you a low base rate tracker interest rate whereas high LTVs will mean your interest rate differential will be higher.
Before signing up to any of the above you should always check whether your lenders charge an early redemption penalty, overhanging redemption penalty and whether there are any application fees associated and so on.

Other types of mortgage

In addition to those listed above there are other types of mortgage that you will come across including:

The cash-back mortgage: this is where a lump sum is paid to you once you have completed your mortgage. Generally the amount repaid is between one and twelve percent which is agreed between you and the lender at the start of the mortgage. Fees and early redemption penalty charges commonly apply to these mortgages.

The flexible mortgage: by its very nature, you can make flexible payments into this mortgage – underpayments or overpayments. Each lender has different rules about how many underpayments you can make or you could find yourself crippled by interest if you underpay regularly. It’s possible to take payment holidays or even borrow money back depending on the lender, but the real benefit comes from the opportunity of being able to pay off your mortgage early thus saving yourself a lot on interest repayments. Where you are higher risk to the lender, interest rates will be higher – a feature of flexible mortgages.

Current account mortgage: this combines a flexible mortgage as above with a current account. Effectively, your income gets paid into your current account and is partially used to pay off you mortgage. Your lender sets your borrowing limit like an overdraft and at the end of each month once all income and expenditure is accounted for, the balance will be put towards your mortgage. The interest rate will fall as more payments are made. Features of the flexible mortgage apply i.e. overpaying, underpaying, payment holidays etc.

Buy-to-let mortgage: this involves using your rental income to pay off your mortgage each month. Once the mortgage is paid off, the property is yours in its entirety. You could keep it as a rental property, pocketing the income or sell it on. Buy-to-let mortgages are similar to regular homeowner’s mortgages but the risk assessment takes into account the rental income and potential of that income once the mortgage is paid off. As such, you may be able to borrow more money. However, you are at risk if you find yourself without tenants for a sustained period of time.

1. Spend less, save more!
OK, so this is going to take a while but you have to start somewhere. It is surprising how much spending is surplus when you scrutinise it. Are you renting? Could you rent somewhere cheaper for a while? How much would that save you in a year? That’s just one example, but when you look at your spending activity, really try to think about what you could rein in on without making yourself too miserable. Even tricks like taking a set amount of cash out with you for your nights out and NOT taking your card (we’ve all done the £50 withdrawal at the end of the evening!) could save you a surprising amount each weekend.

2. Put your savings where it counts.
Apathy is a main reason banks keep their customers; the perceived hassle of moving banks puts us off! Have a look around for the best savings interest rates and follow the deals to make your cash grow faster.

3. Have you got other savings?
It might be that you have ring-fenced your savings for different things. If you have a pool of savings outside of your deposit, consider the money you will save by getting a better interest rate on your mortgage against any returns you are currently getting on your cash in a savings account.

4. Consider relatives
It’s never easy to ask for help, and particularly difficult to ask for money. However, the only way many people get a foot on the first rung of the property ladder is to ask their parents for a loan. Make sure you have agreed a time period by which you will pay them back and have set amounts as to what this will be each month. This will help avoid any uncomfortable conversations that may arise from either party. You can offer to pay them back with interest, but remember this could be considered as an income to the lending party and could be open to taxation!

5. Get a bank loan
This is a tricky one as effectively you are opening yourself up to more debt. However, if you do the maths carefully enough and find that there is an advantage to getting a loan to boost your deposit AND that you can pay back the loan and mortgage repayments together, then go for it.

6. Look outside the box
There are some housing foundations that are set up to help first-time buyers into the market. These may revolve around part-ownership or government-assisted mortgages with the opportunity to buy the property in full at a later date for example. Have a look around in your area to see if any schemes exist, you may be pleasantly surprised.

Why remortgage?

Most obviously, you would remortgage in order to save money. By switching your mortgage to one with lower interest rates you will be reducing your monthly outgoings and potentially saving significant amounts of money in the long term. What may seem like tiny tweaks in the interest rate could have a huge accumulative effect so it is always prudent to look across the long term when you are assessing your repayments. If your goal is to free up money each month in the short term, you may wish to switch to a longer term mortgage i.e. spreading the length of time that you have to make your repayments will reduce your monthly amount.

Debt consolidation

A good reason to switch mortgages might be to take advantage of their lower interest rates in comparison to other loans. Rolling all debts into one low interest remortgage could ultimately save you money and take the pressure off.

Equity release

A key reason to remortgage is to release the equity that might be locked up in your home. In the time that you have owned your house, it may well have increased in value, exceeding the value it was originally mortgaged on; you’re in positive equity. If you want to release this money, be that for holidays, home improvements, retirement or such like, you can switch mortgages to release a cash lump sum or regular income while staying in your home. The amount of equity you release is up to you.

Lenders will often offer remortgaging packages to migrate their customer bases onto different products, show value or perhaps even keep you for longer! They may suggest a fixed rate mortgage at a time when there is a lot of fluctuation in the base rate to offer more security for example. Whatever the reason, make sure you carefully weigh up the benefits of remortgaging - it can be a great way to free up more money to help you enjoy life now, as long as you keep one eye on the future.

Credit card debt contributes to a poor credit history

Monitor your credit record and identify the weaknesses

The first thing you should do is get hold of a copy of your credit report. These are available through companies such as CallCredit, Equifax, and Experian. They consist of your personal information (name, address, marital status etc), your public information (e.g. electoral roll details, court appearances), and, most importantly, your financial history - your available credit, your debt record, and so on. This information will allow you to identify what exactly has lead to your poor credit rating. In addition to this, most companies are advised to explain their decision if they have rejected you for credit so that you can see where you are going wrong, and take steps to correct this.

It is also important to read your credit record as you can check for any errors or omissions that may be having a negative impact on your rating. If you find any, talk to the company that input the incorrect data. You can also add a short notice of correction to your record explaining the error, which lenders have to take note of.

If possible, pay off all outstanding debts

This may seem overwhelmingly obvious, but it is of course highly important. If you have the means to do so, make sure all your bills and debts are paid in full. Even the smallest unpaid bill can affect your credit score and remain on the record for up to three years. Of course, this is not always possible. If you cannot afford to do so, try contacting the companies you owe money to and explaining the situation. You may be able to negotiate on repayments and find a means to pay that fits your budget – companies would rather your bills get paid over a longer period than not at all. Keep a constant eye on your bills. Using internet or telephone banking will make this easier, and will help you see if you will not be able to make a payment ahead of time, meaning you can renegotiate terms before an unpaid bill ends up marring your record.

Approach the situation logically and think things through

There are a number of small issues and changes that can be addressed to help improve your credit rating, but they require that you make decisions objectively and rationally. Firstly, if you have been rejected for credit or a loan by one company, do not immediately apply elsewhere. The chances are that the next company will reject you too as they are likely to be assessing you by very similar criteria. This can lead to an ever-worsening spiral of rejection which will not look at all good on a credit record. Instead, after the first rejection, find out why this happened, and address the problem. It may be hard to do this if you are in urgent need of money, but it will help you in the long run.

Cut up the credit cards

Secondly, don’t use credit cards for all your spending needs, especially the extravagant ones. Use it either only when needed (perhaps keep it hidden where it is out of sight so you cannot be tempted) or else use it only for small purchases that you know you can repay in full at the end of the month. The latter may be the most useful, as it demonstrates your ability to borrow and repay, which will reflect well on your credit score. On the other hand, do not think that not borrowing or not using a credit card at all will help your score. Having too much available credit puts lenders off. You need to be seen to have a record of being able to borrow and return money in order to be desirable to credit companies, so do charge smaller amounts to your card, and make sure you close down accounts that are no longer in use.

Joint accounts

Thirdly, if you are thinking of setting up a joint account with a friend or partner, make sure you are fully aware of their financial habits. Sharing a bank account with someone who has established a very good record will boost your own. Conversely, sharing with someone who has a poor record will also drag yours down. Of course, this requires you to be rather harsh on your loved ones, but if it saves you from financial difficulty in the future, it is a necessary evil. Make sure also to remove any old joint account partners from your record, because even after the account is closed, your name is still linked with theirs, and their poor credit can haunt you even after you have severed all other ties.

Seek professional financial advice

Finally, if the situation seems dire and you cannot get a handle on your finances alone, seek professional help. Accountants and credit counselling experts are available to help you manage your money more efficiently, and keep your expenditure in line.

Secured vs Unsecured loans: What’s the difference?

A Secured loan means that the lender holds a valuable asset belonging to the borrower as collateral against the payments. Therefore, if repayments are not met, the asset can be seized from the borrower and sold to cover the cost of the missed installment. This is often the borrower’s house, but could also be a car or any other valuable item.

An Unsecured loan is, as you might have guessed, a loan that is not protected by an asset. The borrower is bound by contractual obligation, and may be met with late payment charges or could even find themselves in court should they fail to meet each installment.

Which loan is right for me?

The answer to this question lies in what you need a loan for, how much you need to borrow, how long you intend the repayment period to be, and the state of your personal finances.

Certain types of loan are by their nature secured, for instance Home Equity, Homeowner, and Car loans. This means that until purchase is entirely complete, the product remains in some respect property of the lender, and can be resold to cover their losses. This is really the same as any product – when you’re shopping, the item in your basket is not truly yours until you have checked out, and, should you find that you don’t have enough to pay for it, it can rightfully be reclaimed by the retailer so that their profit is not affected. Personal loans are often unsecured because factors of amount and term length are usually lower, so there is less risk to the lender.

Borrowing amounts

The amount you wish to borrow will affect whether or not your lender will require collateral. Unsecured loans are usually available up to £25,000, so if you require a relatively small amount of money for a short-term project, an unsecured loan may be useful. Amounts over £25,000 are usually secured because of the increased level of risk to the lender on offering money at that scale. They need the guarantee that they will be covered should you fail to repay them. However, Secured loans can also be taken out at costs as low as £3000, and up to £50,000 on average. Some lenders may increase to £100,000.

Loan repayment periods

Generally speaking, Unsecured loans have much lower repayment periods. Around the £10,000 to £25,000 mark, repayment term lengths may stretch to as much as ten years, but most are shorter, if only because the amount is usually much lower than with a Secured loan. Some lenders may also allow occasional over-payments (if, for instance, you found you had a little extra money one month) and lump-sum payments alongside the usual pre-determined fixed monthly payments. This is because, without the security of a secured asset, the lender wants their money back as soon as possible – the less time it is out of their hands, the less likely it is, in their view, to be lost. Interest rates tend to be much higher, calculated by your income and credit history, to ensure the lender is not left wanting. Secured loans, then, will normally have a longer repayment period because the collateral held by the lender allows them to relax slightly about their money – they know they will get it back one way or another. Payments are made in agreed monthly installments, and terms usually last between three and twenty-five years. Interest rates are also lower to reflect the longer repayment period. Therefore, Unsecured loans are suitable for short-term projects (for those with the money readily available to meet installments at least – see below), while Secured loans may be better for those who need money over a period of time, or who do not have enough income to pay off their debts in larger amounts.

Personal financial circumstances

Your personal finances, credit history in particular, will also have an effect on which kind of loan is most suitable for you. Because of the recession, lenders are becoming less willing to loan money to those with a poor credit rating, because this increases the risk to them. Where there is no security on the loan, lenders will normally set interest rates based on the borrower’s credit rating. They are therefore also likely to charge higher rates of interest on Unsecured loans for those with worse credit histories in order to recoup their money. Those with a poor credit history may find, then, that they are more likely to be accepted for a loan, and given a better interest rate once they are accepted, if they can offer an asset as collateral for a Secured loan. A Secured loan is also a more viable option for those who are self-employed, or who have recently changed jobs as both of these factors affect your desirability in the eyes of a lender.

Risk assessment

Risk levels should also be taken into account. What eases the mind of the lender works as a bane for the borrower – a Secured loan puts your home, car, or valuables on the line. If you fail to meet your repayments, you risk losing it. If you do not think you are capable of meeting repayments, it may not be wise to risk your property. Unsecured loans do not carry this level of risk, but failure to pay will still damage you financially – be it in affecting your credit rating, or hitting you with late payment charges.

Think carefully, then, before deciding which kind of loan to choose. Take into account all the above factors. For a small, personal, short-term loan (e.g. for funding a wedding, or a similar one-off expense), an Unsecured loan is probably the better option. Secured loans are much better for those who may have poorer personal finances, or who need a more substantial and on-going loan. The bank, building society or broker you take out a loan with will advise you on what is best for you.