What is a Personal Loan?
A personal loan, also known as an unsecured loan is a loan that is issued and supported only by the customers credit rating, rather than by a type of collateral, e.g. your home. Generally, borrowers must have high credit ratings to be approved and the loan itself can offer higher interest rates and less flexibility compared to secured loans. Personal loans are typically for borrowing anywhere from £1,000 to £10,000.
Loans can be cheaper the higher the amount you borrow (as the lender is guaranteed more in interest repayments), although the upper limit for personal unsecured loans tends to be up to £25,000. Please remember to check that you can afford the monthly repayment.
Benefits of a Personal Loan
- These loans are usually more widely available.
- Can be used for a variety of purposes such as a car or home improvement.
- The lender does not typically require the loan to be secured against an asset, e.g. your home, so there can be less risk involved.
Compare with Quotezone
With so many loan providers available, it can be difficult to find an appropriate loan to suit your needs. Quotezones partner, Love Money, makes this easy with their online comparison table. Simply input some details about your loan and you can filter down to see the providers that suit your needs best.
Links to impartial or non-profit organisations that can maybe provide information and advice.
Regional Advice on debt from Step Change:
We only introduce you to other credit brokers or display listings produced by other credit brokers. We are not a lender.
Its important to remember every time you are refused an application for a loan it may impact your credit rating. It is advisable to only apply for the loans that you are confident of being accepted for.
Quotezone is a trading name of Seopa Limited who are authorised and regulated by the Financial Conduct Authority as a credit broker. You can check this out on the Financial Services register under reference 313860. Seopa is a credit broker and not a lender.