Securing an unsecured loan?

RabbitEars

We currently have an unsecured loan with Northern Rock which appears on our mortgage statement. My husband queried what would happen if he were unable to pay the loan and was told that NR would take us to court and have the loan secured on the house.

I am confused as to how they can charge a higher interest for an unsecured loan, and then forcefully secure it on a property if we cannot pay. I would like to ask someone independent of NR, but do not know where to start. Please could you give me some ideas of who to approach?

CLAPTON

any unsecured loan can in principle be secured on an asset (typically a property).

the lender would need to apply to the court for a charging order on the asset and it depends upon the judge whether one would be granted and what level the payments would be set. if the payments were maintained then the charging order would have to wait until the property was sold.