With so many outgoings and not as much coming in individuals are being stretched financially and still have to find ways to pay for many items that they need, including utility bills and monthly insurance cover to basic items such as food. A solution to the problem for many individuals is to agree a personal loan with monthly repayments. This can turn out to be a great relief or, if managed incorrectly, a calamity that can stay with you for a number of years.

 

If you are reading through this then you have access to the internet and should visit The Motley Fool or uSwitch as they both contain up to date information on the personal loan market and also have comprehensive loans comparison centres. If you don’t know something and you can’t find it on the site then ask someone. Online this is just a case of visiting a discussion board that most comprehensive sites provide.

 

Always be certain to calculate how much you can actually afford to pay back on time and work out how much you should borrow from that. Stick to this figure and then think if the loan is the right option for you. A sensible measure before you take the plunge and borrow money is to make use of a loans calculator - they're pretty straightforward and can be found on most lenders websites. As an example, the Natwest Loans site requests users to insert a figure to borrow and how long they would like to make repayments; the calculator then returns the APR, the total to repay and the amount to pay per month. If, for example, you input £3000 as the amount to borrow and a time period of 36 months the calculator returns the APR at 13.8% with a total repayable of £4,251.60 at £118.10p per month. It should be noted that the APR varies depending on how much you choose to borrow.

 

Don’t take the figure produced by a loan calculator as definitive or as a specific example for your situation. You should compare loan calculators across companies but remember that your personal situation and many other factors will be taken into account before you get a specific figure.

 

Here’s a quick breakdown of some of the major lenders current personal loan deals (at the time of writing):

 

 

If you get into trouble keeping up with payments don’t waste time and let your loan company know as soon as possible, keep in mind that if you do waste time the consequences on your future borrowing and credit record can be severe. Get in touch as soon as possible and try and renegotiate a payment plan.

 

When borrowing money from a lender the fundamental rules are to learn about what’s relevant to your situation and borrow within your limits so you don’t fall in to a cycle of taking on more debt to pay off existing loans.