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. Using the Uswitch loan comparison tool, you can find the best loan for you.
Some loans are for specific purposes:
Mortgages for a property
Car finance for a vehicle
Home renovations
Personal loans can be spent however you wish. Compared with bank overdrafts or credit cards, these loans can be cheaper, so they could be one of the best finance options.
You will be 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.
The term of the loan is often fixed, meaning if you want to pay off the loan early, you can be charged a fee.
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.
Secured loans are often 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 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.
Rates vary between different loan types, so it’s important to know what you're looking for when you compare loans.
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.
A mortgage is an example of a secured loan with the property as the ‘security’. So, if you don't meet your repayments, the mortgage lender can take your house.
Car finance is another type of secured loan. The loan is secured against the vehicle, so the lender can repossess your car if you don't keep up with the repayments.
You may be able to borrow from £3,000 up to £500,000 with a secured loan. You are likely to receive a cheaper rate of interest for a secured loan compared with an unsecured loan, as the lender has more 'security' they will be repaid.
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
The cheapest loan rate available to you also depends on your credit history, the size of the loan and how much you can afford to pay back each month.
In general, the interest rate charged on an unsecured loan will usually be higher than for a secured loan as there is less security the lender will be repaid the amount owed.
The following are different examples of unsecured loans:
Personal loans
Car loans
Debt consolidation loans
Bad credit loans
Guarantor 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