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PROPERTY NEWS & ADVICE
A Brief Guide to Personal Loans
In
today’s society many people are stretched financially and
sometimes find themselves short of money to pay bills or basic
living costs. Depending on what is prioritised you may find
you still have to find funds to pay for insurance, phone bills,
tuition fees or even necessities such as food, clothing or
rent.
One
longer-term solution that some people follow is to take out
a personal loan and pay it off on a monthly basis. Depending
on the deal you get this can turn out to be a blessing or
a burden. Many people now look sites such as uSwitch or The
Motley Fool’s loans comparison site for advice on the best
deals around at the moment.
As
well as reading content on these types of site you should
also not be shy to ask lenders any questions you may have.
Remember that a personal loan is a long term commitment so
you should always understand fully what you are getting and
ask if you don’t.
Always
be sure to work out how much you can realistically afford
to pay back on time and work out how much you should borrow
from that. Stick to this figure and then think if the loan
is the right option for you.
A
sensible measure before you take the plunge and borrow money
is to make use of a Loans calculator – they’re pretty straightforward
and can be found on most lenders websites. The calculator
on the Natwest Loans page, for instance, allows prospective
borrows to enter the amount they want to borrow and the timescale
they would prefer to pay it back over and gives them the monthly
payment and the total amount payable; say you wanted to borrow
£5000 and pay it back over 4 years the calculator will inform
you that your monthly payment would be £214.72 (including
Loan protection) and that the total amount payable would be £10,306.56.
Remember that is not definitive, the actual deal will depend
on your circumstances, but it is a quick and handy indicator
of what you could expect and should help you gauge whether
you think you can afford it . You could then compare that
deal with another lender.
Here’s
a quick breakdown of some of the major lenders current personal
loan deals (at the time of writing):
Lender |
Loan
Type |
Typical
Rate |
ASDA Finance |
Personal Loans |
Typical
6.9% |
Natwest |
Personal Loans |
Typical
6.9% |
RBS |
Personal Loans |
Typical
6.9% |
Alliance & Leicester |
Personal Loans |
Typical
6.5% |
Moneyback Bank |
Personal Loans |
Typical
6.3% |
Never
procrastinate if you get into any difficulties with payments
and remember that if you overstretch and cannot pay off the
loan it could potentially impact you in the future as it will
stay on your credit record. Contact your lender as soon as
possible and try and work out an arrangement.
However
you borrow just remember to research and budget.
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