Personal Finance - Applying for a Personal Loan

There are numerous reasons why a personal loan may be required, home improvements, car purchases, holidays or new furniture. Make sure you understand what type of loan you are taking out, if it is secured against your property or an unsecured loan.

It is wise to compare what personal loans are available for your circumstances, as a homeowner, private tenant, council tenant, or other circumstances. Proof of earnings, bank statements and proof of identity will probably be required.

There’s no shortage of companies willing to offer you readies in the form of a personal loan. You can usually borrow up to £15,000 from six months to 10 years, but remember to tread carefully and avoid loan sharks charging impossibly high interest. And be wary of falling behind on repayments, not only could you lose your home if a loan is secured on it, but you will almost certainly have trouble buying future financial products and getting credit.

Work out your financial position before you sign up for a loan, making sure you can afford the monthly payments.

Generally, the more you borrow, the lower the interest, but rates do vary so shop around. It’s not so difficulty comparing personal loan rates these days, due to the help of financial comparison sites.

Your choice of personal loan depends on how quickly you need the money and how soon you can pay it off. The most competitive personal loan providers charge interest of around seven to eight per cent.

Get personal loan quotes and check if the personal loan includes insurance, then pick the cheapest rate. If there’s a chance of repaying loan early, look for one without redemption penalties.

Many companies can arrange a loan within 24 to 48 hours, and often the quickest method of securing the loan is applying on-line. All internet based companies also have a contact number for any queries you may have.

Most companies do have age restrictions, for instance they will only loan to people aged between 23 and 65.

If your earning are based on commission, or you work freelance with a non guaranteed monthly income, check out loans that are geared for those with a variable income who want to pay different amounts each month and clear the loan early - like a credit card but with higher limits available.

Lenders will encourage you to take out insurance - always a good safety net, but this does add cost. A good alternative is accident, sickness and unemployment insurance, which protects your entire income including the loan, if you can’t work.
And finally, before signing on the dotted line of your personal loan form be sure to check the terms and conditions, and be clear about the monthly loan repayments and penalties. There’s a lot at stake if you get this wrong.

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