About Personal Loans
You can usually borrow up to £20,000 for a period that can range from six months to 5 years. Generally speaking, the more you borrow, the lower the interest, but rates vary from around 6% to 20%, so you'll need to shop around. It’s difficult to compare loan rates because different lenders calculate the total cost of the loan (known as the APR or annual percentage rate) in different ways.
Get a Range of Quotes
Always make sure you get a range of quotes. You can do this by using the loans calculator to find the best quotes. Check if the quoted interest or repayment amount is stand-alone or if it includes things like loan insurance - then pick the cheapest rate.
Therefore it’s best to note what your monthly repayments will be, rather than just take out a loan by the lowest APR it offers. A bank could have an APR of 6.7% for a loan of £5000 and charge you a monthly payment of £168.00 a month with payment protection plan, while another bank could only charge you £165.00 a month but has an APR higher than 6.7%.
Early Redemption
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. Lenders will push hard for you to take out the insurance, so think carefully about whether you need it or not. If you're in any doubt about being able to meet the repayments, insurance will put your mind at rest. Unfortunately it will also make the loan more expensive.
