Personal loans

Unsecured lending is the most expensive mainstream borrowing after credit cards - and the most variable between borrowers.

Why rates are higher

A personal loan has no collateral. If the borrower stops paying, the lender has no house or car to recover, so the price has to carry that risk. That is the whole explanation for the gap between a mortgage rate and a personal loan rate on the same day, to the same person.

What drives your rate

• Credit score - the dominant factor, and the spread across bands is wide.
• Debt-to-income ratio - lenders are testing whether another payment realistically fits.
• Loan amount and term - shorter terms usually price better.
• Income stability - steady documented income improves pricing.

Debt consolidation, honestly

Consolidating credit-card balances into a fixed-rate personal loan can genuinely lower the interest paid and replace several unpredictable payments with one. It only works if the cards stay paid off afterwards. Consolidation that becomes fresh card spending leaves the borrower worse off than before.