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Opting for a personal loan is most of the time the only option left when faced with a financial crunch. There are a number of loans available for different amounts, repayment periods, interest charges and terms and conditions. The range of repayment periods varies depending upon the amount to be borrowed and the purpose for which the loan is to be used.

Personal unsecured loans are available for amounts between 1000 pounds to 25,000 pounds. Amounts exceeding this can be availed of using a secured personal loan, if you are the owner of a home.So if you are looking for an inexpensive loan, then you should compare personal loan from the loan market. You can start by comparing the APRs of the different loans. Lenders quote different types of rates. So before you compare loans, it will be helpful for you if you familiarize yourself with them.

. A fixed interest rate is one that remains consistently the same during the loan term, notwithstanding any fluctuations in bank base rate. This implies that your monthly repayments will remain equal. Therefore, you can plan and budget your repayments properly.

. A variable interest rate rises and falls with any corresponding increase or decrease in the bank base rate. Thus, your monthly repayment amounts will also fluctuate accordingly.

Additionally, you need to know about two other interest rates before you start to compare personal loan with others. The first is the typical interest rate. This is offered to over 66% of consumers whose loans get approved. So if you know the typical interest rate, then you can get a fair idea of the interest charge you will receive. The exact rate, however, will be dependent upon the amount of the loan, the repayment period and an analysis of your personal circumstances.

The second interest you should be in know of when you compare loans is the set interest rate. This is the fixed rate offered to all customers regardless of factors such as credit rating, loan amount and the term of the loan.


When you compare personal loan, you should ideally look for the one with the lowest APR. However, you should also be wary of the small print in the loan agreement, as sometimes additional costs may be added there. Some lenders invoke an early settlement penalty if the loan is repaid before the term is o over. This can sometimes be up to two months of interest charges. Therefore, it is a good idea to read the fine print before signing on the dotted line. If you think your chances of repaying the loan before the repayment period are good, then you could consider opting for a loan which has no early settlement charges. This, even if the APR of the said loan is slightly higher.

The loan amount has to be paid in monthly installments over a specified period of time. If your loan is of a flexible nature, then you can make lump sum or over the top repayments which will enable you to repay the loan in a shorter period of time.



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