Best Personal Loan Guide

What Is a Personal Loan?

A personal loan is an unsecured lump sum that you repay monthly over a set term. They’re often used for home improvements, debt consolidation, and unexpected costs.

How APR Works

APR (Annual Percentage Rate) represents the total cost of borrowing, including both the interest rate and any additional fees. It gives a clearer picture of what you'll actually pay over the year.

Lower APR = cheaper loan
APR varies by credit score, loan amount, and repayment term
Always compare total repayable amount, not just monthly cost

Types of Personal Loans

Fixed-rate: Predictable monthly payments that never change
Variable-rate: Interest rate may rise or fall during the term
Secured: Backed by an asset like a car or home, often with lower rates
Peer-to-peer: Loans issued by individual investors rather than banks

How Lenders Assess You

Before offering a loan, lenders will assess your ability to repay. They typically look at:

Credit score from agencies like Experian or Equifax
Your monthly income and regular outgoings
Employment status and history
Current debt-to-income ratio
Any recent credit applications

Tips for Getting the Best Rate

Check your credit score and improve it before applying
Use comparison tools instead of applying directly at one bank
Borrow slightly less if it means qualifying for a lower rate tier
Avoid submitting multiple applications in a short timeframe
Look out for early repayment penalties

Helpful Tools

Use our Loan Calculator to estimate repayments
Build a detailed plan with the Loan Repayment Schedule
Explore top offers on our Personal Loans Comparison