There are many types of loan available on the UK credit market; such as secured loans, unsecured loans, guarantor loans and instalment loans. Many people will refer to these types of loan as being 'personal loans', because they are usually used to cover personal costs such as home improvements, the purchase of a car or perhaps even a holiday.
The most common types of loan to fall under this remit are secured loans and unsecured loans. A secured loan is often used to borrow a large amount of money over a longer period of time, with the borrower providing an asset with which to act as collateral for the funds. In short this makes the transaction more secure for the lender, who can take possession of the asset should the borrower fail to meet their re-payments and as a result the APR (annual percentage rate) is often low.
In comparison, an unsecured loan is not secured for the lender and therefore the client does not have to provide an asset alongside their application, however this usually means that the APR will be higher for this type of borrowing. An unsecured loan is often taken out for up to five years with a borrowing amount of anywhere between £1000 and £25,000.
No matter what type of personal loan you would like to borrow, determining where to actually borrow from and establishing the suitability of the loans on offer, can be difficult.
At this point it is handy to have all of your options laid out in front of you so that you can make a viable comparison between different loans and the features that are most important to you. It is therefore a good idea to utilise available loan comparison tables, which will provide you with the most important information from each lender regarding the loan that they could offer you.
The main advantage of using a loan comparison table is that you will be able to access information from multiple lenders regarding multiple loans, without the need to scour the net and collect the information you require on an individual basis. Having this level of information in one place, not to mention the ability to filter and compare it can save time. On top of this, you may also come across lenders that you may otherwise have bypassed.
Once you have decided upon the right loan for you, you must be sure that you have the financial stability and income level to meet the re-payments over the entire duration of the term. Familiarising yourself with the small print will ensure that you understand in detail what is expected of you as the borrower and what the lender's responsibilities to you are.
This article was written by Josh Mottershead a communication executive for MyFinace.co.uk which specialise in helping people find the loans they need when they need them. Josh has been interested with finance for many years and has helped in many areas including loans, claims and debt.