A Guide To Personal Loans

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You may need a loan for many reasons. Check out how the internet could help you find a great deal.

Taking out a personal loan is a way of borrowing money from a bank, building society or other financial service provider. You can usually borrow up to £15,000 for a period that can range from six months to 10 years. Generally speaking, the more you borrow, the lower the interest, but rates vary from around 8% to 20%, so you'll need to shop around. This is made more difficult by the fact that it is not easy to compare personal loan rates because different lenders calculate the total cost of the loan (known as the APR or annual percentage rate) in different ways.

Secured and Unsecured

Loans can be secured or unsecured. Secured loans are usually tied to your house - which means if you default, you may need to sell your house to repay the loan. Unsecured loans are not tied into anything, but if you don't make the repayments, the bank will blacklist you and you may find it difficult to take out other financial products, such as credit cards or a mortgage. Loans for specific items such as new cars are also available, often with lower interest rates. If you're taking out a loan for a car, tell your lender.

Pay Back

Most loans are re-paid by monthly installments and the repayment period will be agreed before you get the money. This is usually a fixed period and you will have to pay a redemption penalty - an example being two months interest - if you want to pay it off sooner. Flexible loans, which let you borrow and pay back at will, are becoming more common, but the interest rate charged is often significantly higher.

First decide how much you want to borrow and for how long. Almost all lenders provide loans for up to five years, but if you want a longer repayment period you may find your choice more limited. The longest loans tend to be secured ones.

Quotes

Next you should get a range of quotes. Check if the quoted is stand-alone or if it includes things like loan insurance - then pick the cheapest rate. If there's a chance you'll be able to repay the loan early and save on the interest, look for a loan without any early redemption penalties.

 

Useful Websites

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  • Lending Expert
    Visit Lending Expert for comparison and expert advice on cheap loans, mortgages and finance.
  • All Direct UK Payday Lenders Compared
    Compare over 25 Direct UK Payday Lenders (no brokers) before applying for a loan.
  • Cash Lady
    CashLady is a short term loan service provider in the UK offering payday loans, cash loans and small installment loans.
  • Bridging Finance from Wellesley
    Specialist property finance solutions from the experts at Wellesley.
  • Calculators.org
    These money and finance calculation tools will help you figure out monthly loan payments and the potential expected returns from various investment opportunities.
  • BadCreditLoans.org
    Consumer finance guide offering tips on how to find financing and improve creditworthiness.
  • Add Your Website Here

Further Reading

  • Organising A Personal Loan Online

    Need a personal loan but dont know where to start? Check out our guide to how to get the best personal loan deals online.
  • A Guide To Student Loans

    Student debt is in the press a lot now so what are student loans, maintenance grants and all the issues surrounding them?
  • A Guide to Student Loans

    Student loans. A useful guide to help you understand how student loans work and how much money you could get.
  • Keeping Insulated over the Christmas Period

    Keeping warm and toasty during Christmas is what we all want. So find out how to keep insulated during the festive period with some simple tips.
  • A Friendly Way to Borrow Money

    At some point most of us will need to borrow money. Want to find a relatively friendly way to borrow money in the future?

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