UpMyStreet guides: personal loans

Whether you've got your eye on a new car, want to pay off your overdraft, or are planning for the trip of a lifetime, personal loans can help you to afford them now rather than later. It's important to compare personal loan providers to see who can offer you the best deal. This ensures that you're not overstretched when it comes to repayments and you're not paying more for personal loans than you need to.

When applying for personal loans (also known as unsecured loans) you're not required to secure it against your home or other investment. The loan is repaid on a monthly basis over an agreed amount of time, and interest will be added to your payments by the lender. As lenders offer a wide range of deals - from different rates of interest to payment terms - compare all personal loans to ensure you get the best deal for your circumstances.

Checklist when comparing personal loans

Make sure you look at the following before taking out a personal loan:

1. APR

   You should look for the APR, or annual percentage rate, when you compare personal loans and providers. This takes into account not just the interest on the loan but also other charges included, such as the arrangement fee. This could be variable or set at a fixed rate depending on the personal loan you choose.

2. Your personal loan's payment schedule

   Agree on a realistic timetable with your lender for repaying personal loans. Compare a range of lenders on how flexible their arrangements are for doing this at your own pace.

3. Payment protection

   This can protect you in case you're unable to make a repayment, but think about whether paying the extra fees for this service is worth it for you. If you do want payment protection, check the cost before you apply - fees will differ according to each personal loan lender and the total amount of the loan.

4. Early repayment of your personal loan

   If it's likely that you can pay off your personal loan early, check whether your loan lender will charge you a penalty fee for doing this. Some companies will require payment of up to two months' interest, while others will allow you to do this at no charge.

Use UpMyStreet's impartial comparison service to make an informed choice on personal loans and get the best deal you can. When you compare loans on UpMyStreet, we'll ask you some basic details, for example how much you want and the loan repayment period you'd like, and will then be able to show you the personal loan results based on your specific circumstances.

› Compare personal loans