Personal loans

These are usually taken out for large purchases such as a home car or a wedding or to consolidate your existing borrowings. You arrange a personal loan directly with your lender.

You will need to discuss with your lender how much time you need to pay off the loan and how much you can repay each month. Interest will be added to what you owe.

Top tips

  • Interest rates on personal loans tend to be lower than on credit cards.
  • Check if there are any penalties for paying off your loan early.

 

  • The longer you need to pay off the loan, the higher the interest you pay will be, even if the annual interest rate is low.

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