Personal Loans
Personal loans are a prominent form of finance in the UK. Popular for their ease of use personal loans allow you borrow a sum of money without having to provide any form of security, the interest rate you are charged is normally based on your credit rating and the ammount you are borrowing.
Personal loans are used for a wide variety of purposes in the UK including home improvements, buying a new car or consolidating existing debts into a single loan agreement. The vast majority of personal loans offer a fixed interest rate, a fixed rate loan offers you more certainty when budgeting your expenditure and for most people this is the best option. People with a good credit history can normally find a cheap personal loan with an interest rate around 1% above the Bank of England base rate, people with a poor credit history or no credit history are likely to be charged a higher interest rate as they are considered a greater risk.
When taking out a personal loan it's important to remember that no matter how competitive the interest rate the loan is still a debt you have to repay. Therefore it is highly important to compare UK personal loans to save as much money as possible. Before agreeing to any loan agreement be sure you can afford the monthly repayments as failure to pay could seriously damage your credit rating. Also be careful not to borrow anymore than necessary, some loan adverts on TV feature people borrowing a bit extra for a holiday, this is generally not a good idea and simple put unnecessary burden on your finances.
In addition to the interest rate and monthly repayments two other important factors to consider are early repayments and PPI. If your loan offers penatly free repayments it enables you to pay more off your debt when you can, this is always advisable as the repayments immediately reduce you outstanding capital and your long term interest payments. Always check with you lender the terms and conditions surrounding overpayments as the rules vary wildly from lender to lender.
Many loan companies will offer you PPI with your loan; PPI (Payment Protection Insurance) covers your loan repayments in the event of illness, redundancy and death. You must pay a monthly fee for this service. PPI has had much bad press recently with concerns over claims not being paid and policies being missold. Best practise is to consult an independent financial advisor before purchasing PPI, never rush into taking out such a policy without the necessary research as it could be a costly mistake.
Where to Compare UK Personal Loans
The internet has made the process of comparing personal loans extremely straightforward. Simply by entering your requirements you can search hundreds of loan deals in seconds and be presented with a ist of loans most suitable for you. These sites will provide all the vital information such as the interest rate of your loan, your monthly repayments and the toal amount you will repay over your chosen period.
Many sites also provide further details such as information on PPI and early repayment offers and some offer an extra facility to search for loans that best match your credit rating, this can help you avoid applying for loans where you are likely to be rejected. If you are looking to find a cheap personal loan the resources below will provide a useful starting point.
www.ukpersonalloanstore.co.uk lists some of the best personal loan rates available in the UK for you to compare.
www.moneysupermarket.com searches through more than 400 loan deals and offers quick and smart search facilities.
www.moneyfacts.co.uk compares more than 150 unsecured loans and offers a loan calculator to work out repayments.
www.beatthatquote.com looks at over 550 UK loans and quickly finds the best loan offers available.
www.uswitch.com provides a comprehensve and impartial search of the UK personal loan market.
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