Personal loans are simply loans made to an individual. Personal loans are normally unsecured and can be generally used for any responsible purpose. Loan sizes range from £1,000 – £35,000. The APR varies depending on credit profile.
Bad Credit Loans
Bad credit loans are loans for people with a poor or adverse credit history. Due to the adverse nature of the borrower the loans can attract a high APR. Bad credit loans are normally always unsecured.
Guarantor loans are loans that are made to a borrower with a guarantor. The guarantor is typically a family member of friend. If the borrower cannot makes payments on the loan, the guarantor has to take over.
Car finance is for individuals looking to purchase a vehicle, such as a car or motorbike. The finance is secured on the car, so if the borrowers defaults on payment the car can be used to recover funds.
Secured loans are loans that are secured on the property of the invididual applying for the loan. Customers can typically borrow between £3,000 – £500,000+ depending on how much equity they have in their property.
Short term loans are loans that are borrowed over a short period of time, usually around 3 months. Short term loans can be very expensive and should only be taken out when absolutely necessary.
What Is Personal Finance?
Personal finance come in many different types, and can be used for a wide variety of purchases and other financial needs.
Personal finance is a form of credit granted from a lender or bank to an individual. Some types of personal finance are:
- Instalment loans
- Payday loans
- Guarantor loans
- Consolidation loans
- Home improvement loans
- Car loans
Personal finance can be for various purchases, such as to buy a car, or to pay for a wedding, or to do repairs and improvements to your home. They can also be used to consolidate other accounts and debts in one loan, which may reduce the monthly payments and make it easier to handle and budget each month.
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How Much Can I Borrow With a Personal Loan?
Loan amounts can vary depending on the type of loan you are looking for. Loans can be as little as a few hundred pounds, all the way up to £35,000.
Loan terms, or the time you pay back a personal loan can also vary according to the type of loan you require.
Some loans are paid back within 12 months or less, other loans longer, 60 months or more.
Interest rates or APR’s/annual percentage rates can also vary among personal loans. Rates will vary according to the type of loan, how long the loan is for, and also the borrower’s credit score.
What Can I Use a Personal Loan For?
You can use your personal loan for a variety of purchases and other financial matters.
Some borrowers take out a personal loan in place of a car loan or car finance to buy a car. This way they can purchase the car like a cash buyer, and have a stronger negotiating position. In addition, the loan is not secured by the car, such as with HP finance. You own the car outright from the beginning.
Personal loans can be used to consolidate other accounts or debts. Maybe you have some high interest rate credit cards you would like to consolidate, or other loans.
By consolidating them with one (1) loan, you only have one (1) monthly payment, which can be lower than what you previously paying. This can help in budgeting, and also in getting out of debt.
Maybe you want to do some improvements around the house, a personal loan can help with this.
Getting financing for a car, be it Hire Purchase Finance, or some other form of a car loan, is also personal financing.
Financing a car is an easy way to buy a car and get on the road, and also not need a huge deposit. As the car secures the loan, lenders may consider borrowers with less than sterling credit, or lower credit scores.
Short-term Personal Loans
Personal loans that are paid back over 12 months or less, are considered short-term loans. These loans can be in the form of a payday loan, or an instalment loan that has a short-term and is paid back in 6 months or 12 months.
These personal loans are good for financial emergencies, such as car repairs, a boiler repair, or other unforeseen financial emergencies.
Some short-term personal loans, such as payday loans, can have a high interest rate or APR/annual percentage rate associated with them.
In part this is due to the fact the loan is unsecured, and also with payday loans, credit scores and credit scoring is not used in approving the loan.
Whatever personal loan you require, Loanable can help you find your loan!