If you’re thinking of doing some much-needed home-improvements, finally taking that trip of a lifetime or paying for a fairytale wedding you may be looking at getting a personal loan. There are plenty of lending options out there, so it’s important to understand what a personal loan is and make sure it’s the right choice for you.
A personal loan is an amount of money lent to an individual by a bank, building society or other commercial lender. You’ll be given the loan in one lump sum and will have to pay it back in monthly instalments over a set amount of time. When you pay back the loan, you’ll also pay interest on the amount you’ve borrowed.
APR is a helpful phrase to understand if you are looking at personal loans. APR stands for Annual Percentage Rate and describes the percentage of interest you’ll pay over the course of a year on a loan. APR also includes any fees and charges you will pay over the year as well – so it’s an overall figure of the annual cost of the loan. APR is calculated in the same way for every company (it’s the law that any loan / credit card / hire purchase agreement must show APR). APR is a way of helping customers make comparisons between different products. The lower the APR, the less you’ll pay for your loan.
Here are just a few benefits of obtaining a personal loan:
- Fast & simple loan decisions
- Low fixed rates and set repayments
- Use funds for nearly any purpose
- No hidden fees
- No collateral required
- Borrow only what you need