A Personal Loans is... A UK personal loan can be secured or unsecured. Secured personal loans means that your property is the security for the amount you borrow. If you fail to make loan repayments you may be at risk of losing your property. Secured personal loans generally will offer a lower rate of interest compared to unsecured loans, as there is less risk for the lender. UK personal loans are usually amounts between £500 and £15,000, over a repayment period that ranges form 6 months to 10 years.

Personal Loans Interest rates... Interest rates charged vary depending on the amount borrowed as well as the repayment term over which the loan is to be repayed. As a rule the higher the uk loan amount the less the amount of interest charged by the lender. A frequent trick of the trade used by the lenders is called headline interest. The headline interest rate is the one see at the forefront in the adverts, UK Loan Find recommend you ignore it!

Interest?... What is it? When you borrow money from a lender, they make money by charging interest. If you have borrowed £100 and the interest rate is 10% it would mean you are paying £10 in interest - so you'd have to pay a total of £110 back.

Fixed or Variable... The lender's interest rates can either be fixed or variable, although the majority of unsecured personal loans do offer a fixed rate. Many uk secured loans You shoud always compare the Annual Percentage Rate (APR) of different lenders as well. Flexible loans allow you the options of both over-payments or under-payments. This can be benefitial, depending on your personal circumstances, however, the rates of interest charged on these loans can be uncompetitive in the general market. If you can't get the full flexibilty you want try looking for a loan that allows for Early Repayment as some lenders do charge you for early repayment.

Credit Rating... When you apply for a loan, your income and financial commitment details are collected to determine a credit rating and confirm whether or not you can afford to take on the Personal Loan. The suitability of the Loan itself for its intended purpose is also assessed. Lenders use credit scoring facilities and credit reference agencies to assess your suitability. This will be via one of the major credit reference agencies like Experian.

Loan Alternatives... Depending on your circumstances and your requirements, there may be a more cost effective way of borrowing money than getting a personal loan.
[ see loan alternatives ]

Arrangement Fees... Some lenders charge arrangement fees. Avoid them if you can unless the lender can prove the loan will be cheaper overall than loans which don't charge fees but have a higher interest rate. These higher rates will be reflected in the APR.

Always get three quotes... Some lenders charge arrangement fees. Avoid them if you can unless the lender can prove the loan will be cheaper overall than loans which don't charge fees but have a higher interest rate. These higher rates will be reflected in the APR.

Penalties... Some lenders charge arrangement fees. Avoid them if you can unless the lender can prove the loan will be cheaper overall than loans which don't charge fees but have a higher interest rate. These higher rates will be reflected in the APR.

Brokers... Brokers are firms that specialise in searching the uk loans market to get the best deal for you. Beware as some of them will only deal with a limited number of lenders and it is usually the ones who give the broker the best commissions. To make sure they do actually find you the best deal, compare the quote with others and also watch out for any Arrangement Fees.

Consumer Credit Act... The Consumer Credit Act is a law that governs loans of up to £25,000. The act controls the amount that can be lent and how the loans can be marketed processed, collected etc. [ read the Consumer Credit Act here ]

Credit Agreement...The credit agreement is the written agreement between you and the lender, which you will have to sign. Always read the small print carefully and do not be afraid to ask any questions you may think of.

Where do you get a loan?... Banks and Building societies are the obvious and most traditional places to get loans but supermarkets and other surprising sources are now breaking into the personal finance market. Tesco Personal Finance for example offer extremely competitive loan rates and are a long established well trusted company. You can either visit lenders phone them or nowadays most have websites where you can apply online. Loan brokers advertise in the press and usually have call centres or websites. ALWAYS be very careful of who you deal with though. There are still loansharks waiting for the unsuspecting.

The APR... The Annual Percentage Rate ( APR )provides a true comparison between different loans. The APR takes ALL the costs of the loan into account and was introduced by the government to prevent hidden charges.
Charges could otherwise be hidden, a monthly interest rate may claim to be 1% but the APR may be 15% which is more than 12 times the monthly charge. The APR has to include everything, and the monthly rate can be used as a powerful marketing tool. Showing the APR is a legal requirement and all lenders must make it clear what the APR is on each of their loans. The lower the APR on a loan the better because it means you repay less interest.

The Base Rate... The Base Rate is set by the Bank of England and is treated as the standard interest rate reference point. Basically the Bank of England decide whether interest rates go up or down.
The lender's interest rate will be set at an agreed level higher than the base rate. If the base rate is 6% and you're paying 2% above it (ie "2% over base rate") you'll be paying 8% interest. (6% plus 2% = 8%).
If the Bank of England decide to raise it by 1.0% overnight the base rate would then be 7.0%. Meaning a variable rate loan would then be 10.0% - still 3% above the base rate.