What are Personal Loans?
Personal Loans are loans where you borrow a sum of money from a lender and pay it back over a fixed time period through monthly repayments. All lenders will charge you an interest fee, so when borrowing you must consider the amount you want to borrow along with the time you would like to borrow it for. The longer you borrow money for, the interest fee will be higher.
Typically they’re used for things which will cost that extra bit more, for example:
- Debt Consolidation
However, they can be used on whatever you choose as they don’t hold any specific purpose. But, there are certain things which we don’t advise you to spend your loan on including things like gambling or addiction. If you spend your loan on something which can impact your repayment, it isn’t worth it. This is because if you fail to repay your loan you will find yourself with serious financial problems.
How much can you borrow?
Personal Loans are larger than most other which are available like short-term and payday loans. They usually range from £1,000 to around £35,000. This means that the repayment periods are much longer, being up to 6 years in some cases. This gives you plenty of time to repay the amount due. Repayment tends to be in smaller monthly instalments, so you don’t have to stress about paying. everything back at once.
Can you apply?
The simple answer is yes. If you fit the criteria of the lender, you can easily apply. The process with Simple Personal Loans is very straight forward and is all done online meaning you could apply from the comfort of your own home. Once you have applied, they will look at what you can afford and whether or not you have the ability to meet the monthly repayments which are required.
Simple Personal Loans even offers bad credit loans. Find out more about them here.
Alternatives to Personal Loans
The main alternative option for personal loans tends to be using credit cards. There are many credit cards which offer 0% interest on borrowing for smaller purchases for up to around 20-25 months, so if you are needing a larger loan for a bigger purchase which will take longer to pay back, a personal loan is probably the best option for you.
And of course, the best alternative to personal loans is definitely saving. Saving up yourself means that you don’t have to pay any interest, you could actually get paid interest. So, make sure you read up about the best saving tips, but remember that saving up money doesn’t work overnight!