Buy nice things without breaking the bank
Personal loans help you raise money for almost anything from new furniture to holidays – or just getting rid of credit card debt. There's a huge range of deals to choose from, and it's important to shop around – especially if you're borrowing fairly small amounts, where interest rates vary widely.
Personal loans – also known as unsecured loans – are big business, and there's a huge number of lenders willing to give you cash for almost any purpose, from buying a new computer to clearing your credit cards. However, it's important to shop around: some lenders won't give money to anyone under 22, while others charge crazy interest rates if you're borrowing relatively small amounts.
In the world of personal loans, the APR (Annual Percentage Rate) is king: the higher the rate, the more interest you'll pay on your borrowings. If you're only planning to borrow £1,000 you'll pay a lot more than the headline rate: firms that offer sub-10% APRs often charge as much as 20% APR on loans below £3,000. It's important to avoid variable APRs, too: if the interest rates rise, so will your payments.
Personal loans are designed for people who are a good credit risk, and if you're not a good risk then the mainstream lenders won't touch you. Be wary of lenders who promise loans even if you've got county court judgements against you: the APRs are much higher than other lenders' offerings, and some firms could charge a hefty setup fee if you're a "problem case".
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