Personal Loans

When you want to take out a personal loan, it is the standard way of borrowing money from a bank, the way of building society or the way of specialist loan company.

Now, most of banks will let you borrow up to £15,000 for anywhere between six months and 10 years, it depends on the health of your finances.

As you know, loans has 2 types:

• Secured loan: It is one that is tied to your house which means you might have to sell your home if you can't keep up with repayments.

• Unsecured loan: It is not tied into anything, but if you default on your repayments you could end up being credit blacklisted. This could prevent you taking out new credit cards, a mortgage or even taking advantage of an interest-free deal in a shop.

When you apply for some loans, in general, the more you borrow, the lower the interest rate will be, but rates vary often from 7% up to 20%. You don't have to go to a traditional bank or building society, there are many banks you can choose for applying a loan.

But you need to be careful when you compare products as lenders calculate the annual percentage rate in different ways. Loans for specific items such as new cars are also available, it is often with lower interest rates.

When comparing annual percentage rates, you have to make sure that you're comparing like with like. You don't pay attention to the monthly interest rates advertised by shops, these are always lower than the annual rate and you can mislead you into thinking you've got a better deal than you really have.

Repayment

When you are in a loan, it means you need to repay the loan for financial institution, and the method of paying will depend on your option, loans might be repaid in monthly installments over an agreed period. This amount of time is usually fixed and if you want to pay off the loan earlier you might have to pay a penalty. The longer the repayment period, the more interest you will pay, so go for the shortest one you can manage.

Besides 2 types of loan above, I will discuss to you another loan, it is known as the Flexible loans

• Flexible loan: It will let you pay back the money whenever you want,it is becoming more common but the interest rate charged is often higher.

The most important thing which you need to make sure that you have toknow exactly what the monthly payments will be, and how much you will pay back in total.

You also remember that if your bank or building society does turn down your loan application, it is obliged to explain the main reasons for doing so.

You may read more information about loan in this website:

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