Personal loans, or unsecured loans, are often the cheapest way to borrow money for expensive purchases and home improvements. Find a selection of low interest loans here to help find the best deal for you.
What type of loan are you looking for?
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A loan is a cash lump sum from a lender that you pay back with interest. Most loans are for a fixed sum and paid back over a set time but there are more flexible variations.
Some loans are designed for funding specific circumstances, such as:
Buying a property
Buying a car
Doing home renovations
Starting a business
When you take out a loan, you are responsible for repaying the amount you have borrowed, as well as any interest and other fees charged by the lender. You usually can't borrow more money on your loan during the repayment period.
Secured loans are where the debt is tied to an asset. If you’re unable to repay the loan, the lender can repossess the asset to offset the payment. Mortgages and car loans are examples of secured loans.
They are typically used for long term borrowing, some for up to 40 years. While this may make your monthly instalments more affordable, it drives up the lifetime cost of the loan because of the interest.
Unsecured loans, also known as personal loans, don't require you to provide extra security to the lender. Your credit rating and financial situation are two of the biggest influencing factors for lenders to consider.
This also means that you're likely to be able to borrow a lot less with a personal loan, than you would be able to with a secured loan.
Also remember that rates can vary between different loan types, so it’s important to know what you're looking for when you compare loans.
It's important to compare loans to make sure that you are getting the best deal on the market for you.
Things to look out for when doing a loan comparison include:
APR
The repayment period
Fixed or variable rate
Application time
When you’re approved for a loan, the money should be paid directly into your nominated account
You then repay the loan in monthly instalments for the course of the agreed term
There's usually a 14-day cooling-off period, during which you can cancel the loan if you change your mind about it
You must repay the full amount to avoid penalties
Other forms of borrowing include; credit cards, overdrafts and store cards.
Asides from overdrafts, these generally don't give you cash when you take them out, but instead give you credit, which you must pay back some of each month.
Depending on the type of credit card you have, you can continue to spend on them while you're paying them off. But they have a set limit that you can't exceed, and you should only ever spend what you can comfortably afford to pay back.
Last updated: July 13, 2023