Personal loans are paid out in a single instalment, which is convenient for anyone planning on making a large purchase such as a car.
This kind of loan will usually come with a fixed rate of interest that is set when the loan agreement is made. If you aren’t sure about any aspect of the loan agreement, it’s wise to get advice from experts such as parachutelaw.co.uk/loan-agreement before signing.
You will then need to make monthly repayments, which will again be of an agreed amount of money. Happily, you can overpay these repayments if you can afford it, or even pay off the loan in full earlier than agreed. This can save you on the cost of interest but may incur a fee, so check the terms and conditions of your loan agreement.
Shop Around
Be mindful that the advert for a personal loan may not reflect the rate you’ll actually be offered – the “representative” rate is not offered to all customers, but instead, interest is calculated according to each borrower’s level of “risk”. Having a good credit rating will help you to get a great deal, but don’t be put off if you don’t have much of a credit history, as lenders are more interested in seeing if you earn enough to cover your loan repayments. Learn more about how to get the best value personal loan.
Spend How You Choose
A key benefit of personal loans is that you can then spend the money just how you choose. Unlike other kinds of loans that can be tied to a particular purchase, once you have the money, you are free to use it as you see fit, whether that’s for a wedding, home improvements, or simply consolidating other debts into a single monthly repayment sum.