Personal Loans Personal Loans are a great way of borrowing funds to pay for a new car, modernising your home or even paying off any outstanding debt that you have accumulated. Personal Loans are loans that are not secured against any form of your assets. An agreement is set in place between the chosen lender and the borrower to repay the capital loan plus any interest set by the lender at an agreed rate over a fixed period.

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Personal loans can offer you the chance to borrow anywhere between £1,000.00 and £15,000.00 and depending on your circumstances, even more. They can give you the advantage of repaying a fixed monthly payment over an agreed period of time which can range from 1 year to 10 years depending on the lenders product. Borrowers will have to repay the loan amount at an agreed interest rate which will be shown in the form of APR (Annual Percentage Rate). The “APR” is the lenders way of calculating the cost of lending you the Personal Loan. The APR can be subject to change as at the time of application a “typical rate” will be quoted, only once your credit check has been assessed by the lender, will the actual interest rate be advised to you expressed as an “APR”.

If you are aged 18 years and above, lenders are happy to consider your application, you don’t have to be a homeowner to apply as the Personal Loan is not secured against any assets. As there is so much information available with regards to personal loans and the amount of lenders offering you loans has increased, its pays to research what is available in the market place in order to get the best interest rates. If you have an existing lender, starting with them is a good option as they may be able to offer you slightly lower rates for keeping your business with them. They will be able to make an appointment with a financial advisor to discuss how much personal loan is be applied for and what the loan is going to be used for.

Once this decision has been made, the chosen lender will then process the application using a credit check against your personal and financial details. If you are already aware that you have a lower credit rating then this may reflect on the lenders decision to loan you the money as the risk will be higher to them due to potential repayment problems arising. If you are declined due to a poor credit rating, there are many specialised loan companies dealing with bad credit loan who will be happy to assist you.

Most lenders now welcome online loan applications and if you choose this method of application, you will be given an almost instant decision as to whether the personal loan has been accepted or declined. Alternatively, lenders have dedicated phone teams responsible for taking telephone applications which will again give you immediate acceptance or denial. Both these methods of application will always use the same credit scoring system operated by individual lenders or loan companies.

The Personal Loan will be approved on the basis that the sum borrowed will be paid back in full plus interest over an agreed term and that the borrower passes a credit scoring system implemented by each lender.

For additional peace of mind, “Personal Payment Protection” can be added to your Personal Loan which means that for an additional monthly fee you will be covered from repaying the monthly instalments if they were to lose their job, be involved in an accident or suffer from an illness which would cause them not to be able to work. This works in much the same way as an insurance policy whereby the monthly fee acts as a premium paid.

You should be aware that if you purchase a Personal Loans that if you repay the personal loan earlier than the fixed term period, the lender may impose a penalty which in some cases can be two months interest.

If borrowing over a longer period of time, the amount of interest payable will increase in accordance with the length of the fixed term.