Personal loans
Borrowing for something that’s urgent and expensive.
Sometimes people borrow money to pay for something special or expensive they need or want to have straight away. It might be a car, a wedding or something urgent and unexpected like repairs to your house. Because you pay interest on the money you borrow, it’s an expensive way to pay for things, but sometimes it can be the best option at the time.
Can anyone get a personal loan?
To get a personal loan you must be at least 18 years old. You’ll also need to show that you’ll be able to pay it back by a specified date.
Tip
Try not to borrow more to re-finance other debt. Talk to your lender instead about ways of reducing the interest on your existing loans.
Shop around
There are different sorts of personal loans and different interest rates, so it pays to shop around to find one that best suits your needs. There can be fees for things like setting up the loan, so make sure you ask about any associated costs you might have to pay.
Secured loans have lower interest rates
Sometimes you can get a lower interest rate in return for reducing the lender’s risk. You’d normally do this by agreeing that if you don’t repay your loan on time they can sell something of yours, like your car, to get their money back. It’s called offering the lender an asset or ‘security’ to get a secured loan, rather than an unsecured loan. But be careful – you could end up losing a lot if you fall behind in repayments.
Tip
Avoid being a guarantor on other people’s loans. If they don’t pay, you will have to.
