Whether you are getting married, need a temporary finance boost or want some extra funds for your business, a personal loan is a popular way to increase your balance for a temporary period.
There are many different types of personal loans on the market. When you are looking for a good deal on a personal loan it can be difficult to know which personal loan is best. Here’s a quick and simple guide to the best types of personal loans and how they compare.
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What is a personal loan?
From time to time you may need to pay for a large expense your usual monthly income won’t cover such as, buying a car, getting married, carrying out home improvements, going on holiday or paying for white goods. Some people also use personal loans to consolidate their debts so they only have one creditor to pay.
A personal loan will give you access to a large amount of money quickly, that can be repaid over your chosen number of months.
Why get a personal loan?
The top benefits of personal loans are that they enable you to obtain a substantial sum of money within hours or days. You can choose how quickly you repay the loan, the interest rate is usually a fixed rate, and if you make your repayments on time, your loan could also help to build your credit score.
Top Types of personal loans
Unsecured Personal Loans
The most popular types of personal loans are unsecured personal loans. An unsecured loan won’t require you to use high valuable belongings, such as your home or car, as security for the loan.
Unsecured personal loans can allow you to borrow up to £25,000, depending on your credit score and other factors. Your repayments could be spread over as long as 24 months. Compare personal loans <to get a quote>
Secured Personal Loans
Secured loans require a high-value item, such as your home or car, to be used as collateral if you do not keep up your repayments. Secured loans are also known as homeowner loans. If you fall behind with your repayments your loan provider can take your home or car.
Bad Credit Personal Loans
If you have a low credit score, you may choose to look for a bad credit loan. Bad credit loans can help your credit score if you make repayments on time. You will find bad credit loans incur higher interest rates and lower levels of borrowing because the risk of late payment is higher.
Guarantor Personal Loans
Guarantor loans are another option if you have a poor credit history and want to take out a loan. A guarantor loan will require a friend or family member to act as your guarantor. They will be liable to fulfil the costs of any repayments you are unable to make and will need to apply for the loan with you.
Debt Consolidation Loans
If you have a number of credit cards you may end up making monthly repayments to many different lenders. Debt consolidation loans enable you to pay off your credit cards in one go and make a single repayment to your loan provider which is easier to manage.
Debt consolidation loans are popular because they can mean that you pay a lower interest rate and only have one repayment to make each month.
Compare the best WeTrust personal loans today and find cheaper interest rates for personal loans online now.