Personal Loans UK - online personal loan information for UK residents

Cheap personal loans for any purpose

Personal loan
If you want to buy something big, such as a car, a personal loan may be suitable. You borrow a lump sum and agree to pay it back is set monthly instalments over a fixed period. Typically, the interest rate is fixed for the duration of the loan, so your monthly payments do not vary. If you want to pay off the loan early, there is usually an early repayment charge.
Many people approach their usual bank to ask for a personal loan or sometimes the shop or salesperson selling the goods can arrange the loan for you, but you can go to any other lender and will often pay less by shopping around.

About UK Personal Loans

Personal loans can be used for many purposes such as paying of other debts, going on holiday, buying an item you have always wanted or funding a once in a life time opportunity.

Personal loans are usually arranged for a fixed term and fixed amount which is chosen at the beginning. Generally the longer the term the lower the annual interest rate charged on the personal loan, but be careful as your circumstances could change in the future and predicting what will happen over a long period will always include some uncertainties. If you want to select a longer period, because that suites your needs, you might like to check to see if the lender is offering "repayment holidays" either at the start of the personal loan (deferred repayment) or during the loan period to help you over a bad spot. These periods of non repayment will always be limited in time, and whilst you may not have to make repayments over that period the interest on the personal loan amount will still be accruing.

Generally the higher the personal loan amount the lower the annual interest rate is but be careful not to get carried away, if you over borrow you may be incurring higher interest charges than you actually need to. Also a long personal loan period means that you will be paying interest for a longer period. And over time that interest cost will cost you more.

If you want the option of paying off the personal loan early, either by making regular overpayments or a single lump sum payment, then check the terms of the personal loan to see if this is allowed, and if so, whether there is any early redemption penalty.

Personal loans fall into two categories, those that are secured on your home, if you are a home owner, and those that are unsecured. Secured loans are cheaper and can be for longer periods because the lender has the security in knowing that if things get very bad and you cannot otherwise repay the loan they could force you to sell your house. Whilst unsecured loans are not directly tied to your home, if you are unable to keep up repayments or settle the personal loan this is likely to seriously damage your credit rating.

When looking for a personal loan check out the APR (Annual percentage rate) since a lower APR indicates a lower cost of borrowing, although some companies do calculate APR in different ways. Also check for hidden costs and charges or rights for the lender to vary the APR charged.

When considering any personal loan think carefully about how much you can afford to pay each month to clear the loan. List your regular outgoing amounts each week /month. Include and add on annual items such s birthdays, Christmas and holidays. Consider annual insurance premiums, car tax, car service and the like. Add in something extra for the unexpected costs that come up each year.

Then work out your income, remembering that some parts of your income may not be guaranteed such as overtime, bonus and tips. It is wise never to borrow the maximum amount you can afford to borrow, but always borrow less, giving yourself a safety margin.