Choosing best personal loan in UK is great
You need to know that personal loans, also known as unsecured loans, are where you borrow a sum of money from a lender, and agree to pay it back over a set time period in fixed monthly repayments.
And then the lender will charge you interest as its fee to lend money to you, so you repay the amount you borrowed plus interest. The advantage is you get cash upfront, but can spread the cost of a purchase over several months or years.
This guide details the cheapest personal loans, but also addresses whether other finance options, such as credit cards, might be cheaper for you.
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And additionally, of course definitely we’ve our clever Loans Eligibility Calculator, which can tell you which lenders are likely to accept you before you apply.
What is a personal loan?
A personal loan is also known as an unsecured loan. This is because you don’t need to secure the loan against something valuable, like your house. Using your home as security means you could lose it if you can’t keep up with the repayments on your loan.
What can personal loans be used for?
Typically, you can use a personal loan for just about anything, and you don’t have to specify what you want the money for. But it’s always wise to check the terms of a loan before you apply. Personal loans are commonly used for large, one-off purchases like:
- A new car
- Education costs
- Home improvements
- Debt consolidation
How to get a personal loan
At Experian you can compare offers from leading providers to give you more choice and help you find the best loan for you.
You tell us how much you want to borrow and we then browse the market and look for the best deals for you. We’ll ask you a series of questions to help us do this, such as what do you need the loan for, your status, tell us about your finances, tell us about you and what is your address and contact details?
Alternatives to personal loans
If you’re looking to borrow a relatively small amount and don’t want to have to pay back a set amount on the loan each month, there are other options.
Credit cards: these allow you to borrow money for spending, up to a set limit. You can use as much of this credit as you choose and as long as you make the minimum monthly repayment on your card, it’s up to you how much you repay each month.
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