Personal Loan Guide

Personal Loans are available in many different flavours, so choosing one that's just right for you can be difficult. Read on to find out about commonly used terms when looking for a personal loan.

Choosing Personal Loans

It may be tempting in the confusing world of personal loans to just go with your bank or a lender that gave you a great deal last time. However, with such a competitive market things change very rapidly. Shop around for a low rate loan that suits your financial situation. A Low Rate Loan is important, but there are many other things to consider when choosing your loan. Check out our personal loans comparison page to find the right loan for you.

Typical APR for a Personal Loan

APR stand for annual interest rate. The typical APR reflects 66% of the lenders customers that are expected to obtain this rate or below. So the final offered APR for the loan will vary depending on your credit history, determined by the lender after performing a credit check. Lenders are legally required by the Consumer Credit Act to only give prominence to their typical APR for loans that they provide.

Repaying Personal Loans Early

When comparing personal loans another detail to look for is what’s known as a redemption penalty. A redemption penalty is an extra fee that you have to pay to the lender should you wish to pay off your loan early. Some lenders offer loans without any redemption penalties, others just require an additional month’s interest, but some can be quite high.

Personal Loan Arrangement Fees

Some lenders charge an arrangement fee to cover the cost of administration in arranging your loan. This fee is sometimes called an administration fee or a booking fee. It can either be a set amount or a percentage of the loan you take out. An arrangement fee is payable on completion of your loan and can be paid up front or you can choose to add it to your loan.  Check our comparison page for the details on each lenders arrangement fee.

Payment Protection Insurance (PPI)

Payment Protection Insurance (PPI) is usually offered as an additional option to most personal loans. This insurance can cover your loan payments should you lose your job or become unable to work due to sickness or accident. The additional cost of PPI is usually just added to your loan amount, increasing your monthly payments accordingly.