Things to Consider
Part of the Michael J Alexander Group
Financial Services
What things should you consider before applying for a personal loan? Information on applying for a loan and aspects to be considered to ensure a personal loan is the right choice for you.
Part of the Michael J Alexander Group
Please note the interest rate we can offer you may be different, depending on your personal circumstances and the credit assessment we carry out as part of your application. This loan calculator is for reference purposes only.
Friday 12th May 2006
High Street banks have strengthened their code of practice over fears that consumers are taking on too much debt
The murky £1bn world of loan protection insurance is under the spotlight again, with accusations of disturbing sales methods
One in five bankrupts is now under the age of 30 as student debt and the consumer spending splurge starts to bite
The glory days when 'rate tarts' could switch their borrowing between credit cards for free could soon be over
What to Consider before Applying
Personal loans are a simple and great way to borrow usually between £1000 and £25000 and can be a good way to finance the purchase of a car, holiday, home improvement or anything else that requires an up front payment. Typical advantages of this type of finance is that the loan repayments are fixed at the outset so you have the certainty of knowing how much your repayments will be during the term of the loan. The other important advantage is that most personal loans are unsecured which is better for you as you cannot lose your property as you could with a secured loan.
The first thing to consider before you take out a personal loan is do you really have to borrow the money at all? If you have savings, you might consider dipping into them instead of taking out a personal loan. Of course if you think doing this will leave your savings a little short, then taking the personal loan may be better for you as you might feel more comfortable. Also as taking out a personal loan is a long term commitment, you should be absolutely sure that you can afford it and will always be able to make the repayments.
The next thing to consider is do you already have the ability to borrow through your existing credit cards, overdraft facilities or perhaps borrowing from a close family member? You may find for instance that you can get a lower rate of borrowing by paying for your purchase with a credit card and then doing a balance transfer to another credit card of yours offering a lower interest rate that the personal loan you are considering.
The next thing you should consider is whether or not to take out some form of payment protection insurance for your personal loan which covers your repayments if you get sick, have an accident, or are made redundant. Payment protection insurance is generally speaking very expensive and sometimes can cost you more than the interest on the personal loan itself. Also when loan companies tell you the APR of the personal loan, it does not include the payment protection insurance cost so you will need to calculate it yourself (use the
personal loan calculator) if you want to know how much the true APR of your loan is taking into account the payment protection insurance. You have to decide for yourself whether it is worth the expensive price you pay for it. If you are self employed, then the value of the cover will be diminished as it will most probably not cover you for unemployment.
UK Unsecured Personal Loans Specialists
Site Updates: Monday 5th June 2006
Site Last Updated: 02/06/2006
Ó www.apersonalloan4you.co.uk - Specialists in Uk personal loan services
IMPORTANT
The actual rate you will pay depends on a credit assessment of your personal circumstances. All figures quoted for Payment Protection include Insurance Premium Tax at the rate applicable on the date published. Any change will affect premiums payable.
