A personal loan is generally a loan of between £1000 and £35000 that is taken out to fulfil a specific purpose, for example, purchasing a new car, funding a holiday or consolidating other debts. They are also known as unsecured loans.
You will agree with a lender to repay the loan over a fixed peroid by making payments each month. Loans terms can vary but typically they fall between one and five years.
Personal Loans Summary
A personal loan is a loan that is repaid back each month over an agreed term. The repayment amount will contain both interest and capital.
Personal Loans are:
- Repaid over a fixed term agreed with your lender
- Attract interest which you pay back in addition to intial amount you have borrowed.
Will applying for a personal loan affect my credit rating?
Applying for a personal loan through Monevo does not affect your credit rating. However it is important to understand if you are offered a loan and proceed with a lender then, the lender may go on to perform additional checks which could effect your credit profile. They should ask for your permission before they do. They do this to understand more about you and your ability to repay the loan.
Some lenders may charge you a one-off administration fee for processing your loan. This fee generally covers the costs incurred to process your loan. If you decide to repay your loan early then the lender may also charge you an early repayment fee. Some lenders do not charge fees at all.
Each lender is different so be sure to understand what fees are incurred upfront and whether there are any fees if you decide to repay early, overpay.
Personal loan interest rates
Interest rates are generally determined by your credit rating and how lenders view you and your ability to repay a loan. Based on this, the advertised rate is not always the rate you will be eligible. By using Monevo to search for your loan you will see tailored rates that are specific to you.
Variable Rate Loans
A variable rate personal loan charges an interest rate that is subject to change. This means that your loan instalments may change during the lifetime of your personal loan.
Fixed Rate Loans
A fixed rate personal loan charges a fixed rate of interest. This means that your loan repayments will not change for the entire term of the loan.
If you are looking for stability in your loan then these are a good option. A Fixed rate personal loan offers stability. You know exactly how much your repayments are each month and can take this into account when budgeting.