Important points to know on personal loans

Thinking about taking out personal loans? Then, read on and get the important information that you need to know.

13:56 01 May 2013

A personal loan, as the term implies, is a loan that you can use for your personal needs. You can spend the money on a car; you can even use the money to consolidate your credit card debts to get lower interest rate and to spread the repayments over a longer period of time.

Here are the other important things you need to know about personal loans:

• Borrowing limits. Generally, you can take out £15,000. However, some lenders offer up to £25,000 but this will depend on your credit score and capacity to pay.

 

• Loan terms. Most personal loans are paid within a year. However, some lenders will allow you to pay within 7-10 years depending on the amount that you borrowed.

 

• Providers. Personal loans are usually offered by banks, building societies, and even supermarket chains at competitive rates. When choosing your provider, ensure that you go with those that are reputable and have been in the business for years so you can avoid unpleasant surprises.

 

• Interest. Interest rates are generally fixed for the duration of the loan. This means that you’ll have an idea on how much exactly you need to pay.