Personal Loan Characteristics
Personal loans vary with the type of lender, and for different amounts and repayment terms. Repayment periods depend on the amount of funds you intend to loan. For larger loans, i.e. £10,000, the range would be around seven to ten years. Typically, the minimum amount you can loan is £1,000 and the maximum is £25,000, although this will vary depending on the lender.When comparing different loans, it is crucial to look at the amount of interest charged or the Annual Percentage Rate (APR), a standardised rate of calculation. This is so you can determine how competitive the loan market really is. Many lenders offer different types of APR depending on the method of application. If you apply through the phone, chances are the APR will be higher as opposed to applying online. It can be difficult getting approved for a personal loan if you have bad credit, no previous credit history, changed addresses frequently, or are self-employed. Still, there are some lenders who can help with loans although the APR is more likely to be higher. Personal loans can be repaid on a monthly basis, and some lenders allow flexibility in repayment terms. Lenders will also offer payment breaks or repayment holidays, meaning borrowers can take a break from payment at an agreed point in the loan term.General interest rates are the fixed, variable, typical, and set. With a fixed interest rate, it means that the interest will remain unchanged throughout the term of the loan, even if the bank rates change. This allows you to budget your finances accurately. A variable interest rate is vulnerable to changes in the bank rate, which can result in your monthly repayments changing during your term of loan. A typical interest rate is the rate you will be offered that other applicants receive. It depends on the loan amount, term of repayment, and your personal circumstances. A set interest rate is offered to every successful applicant in spite of the risks presented to the lender.