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Personal Loan-UK Tips

Started by sajiv, Oct 23, 2008, 10:56 AM

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With so much competition in the UK marketplace, personal loan interest rates are declining. To make loans profitable, personal loan providers add hidden charges to a loan that may catch out those who did not read the small print. So its better read the documents clearly to understand what are the hidden charges in the loan, which might help them to compare with the market rates.

    * A lender will calculate the typical Annual Percentage Rate (APR) of a personal loan in combination with a system called danger/risk based pricing. This means that they assess each individual's conditions and credit history before deciding what rate to offer the individual. Although a lender has to offer the typical rate to 66% of people that apply, it is possible that you won't get this rate.

    * Repaying your personal loan early could cost you, rather than save you money. While there is no set amount, an early repayment penalty can be the equivalent to one or two month's interest. The earlier in the term you repay the loan, the higher the charge. Some providers have scrapped this charge so it pays to shop around.