When you need to borrow money, there are a number of options open to you. One of the most common is a bank loan, offered by most banks, and you can generally use them for whatever you want. If you’re looking for a new laptop computer, for example, this is the type of loan that can be very helpful.
As with any loan, you should find out exactly what you are getting into and do some research on comparison websites to find out interest rates, lengths of loans for varying amounts, and what eligibility requirements you will have to fulfil.
Personal loans are generally unsecured (a secured loan is when you put a specific asset, such as a house, as collateral so that if you fail to pay off the loan, the bank has an asset that it could sell if required to meet the debt). In order to get an unsecured loan, you will usually need to provide evidence of your income or prove you have other assets worth at least as much as the loan being requested.
If you have a good financial track record with your own bank, then it may be easier to get a personal loan from it rather than going to another financial institution. You should still check interest rates from a number of lenders as you could save a considerable amount of money in the longer term.
Interest rates for personal loans can be quite high (in relation, for example, to a mortgage), and in many cases, they may need to be paid off relatively quickly, sometimes over only two years. The longer the repayment period, the more interest you will pay, so you should take this into account before deciding how much you want to borrow and for how long.
If a short term loan is more suitable for you, please see our entire panel of lenders here