Unsecured Loans
If you are applying
for a loan to buy a car or for home improvements or anything else then an
unsecured personal loan
would be the way to go.
These types of loans are not secured
against your home, which means it won’t be at risk if for some reason you
can’t keep up the payments. Loans are currently at an all time low and
companies are eager to lend you money as most people are in debt in the UK
so there is a demand for this kind of business. Even though this loan may be
unsecured it doesn’t mean you will be paying a high APR. Interest rates for
these types of loans are currently in the region of 5% to 6% APR.
An important thing to consider when
comparing loans is the TAR or “The amount Payable” This is the amount you
will be expected to pay and includes all your monthly payments with both the
fees and charges included. I wouldn’t touch the payment protection, as most
lenders will only pay less than 20p for every pound collected in premiums.
Loan companies make billions of pounds out of selling this to its
customers.
If you are
taking out this unsecured loan make sure you are not penalized for repaying
the loan early. 70% of loans are paid off early. Loan companies don’t like
this as they make more money out of you the longer the loan runs; they have
budgeted for the loan to run the full period so beware.
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