Personal loans

Overview of UK personal loans article

What is a personal loan?

Personal loans can be either unsecured or secured. The difference between them is whether you as the borrower need to provide the lender with any security (most cases a house, flat or car). Of course, on this basis, unsecured personal loans need no security and secured personal loans do.

Unsecured personal loans are by far the most popular and used form of borrowing in the UK. They are a great way to borrow in the UK as their rates are usually low in comparison to other forms of UK borrowing, and usually have fixed monthly repayments.

Secured loans are useful for borrowers with a history of bad credit and will require some kind of security and perhaps the interest rate may be higher than that of an unsecured loan.

Typical personal loans are calculated using fixed interest rates, but some do use variable, the former of course being preferrable in most cases as regular payments don't fluctuate. These interest rates are calculated on a basis of APR...

Annual Percentage Rates (APR)

"A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing"

Quoted from: www.guardfamily.org/B06/B0601/A0001_D/ glossary/bhs04_glossary.html

You may have heard the term 'typical APR'. This term is used by providers to state the average rate offered to borrowers. This is due to the fact that the rate you get offered may vary depending on your circumstances etc.

Personal loans are taken out for all manner of reasons, whether it be you need a new car, need a family holiday or just need some extra cash to tie you over.

Get a no obligation quote for a UK personal loan here at My Loan Quote UK