A personal loan is an agreement between an individual or couple and a lender such as a bank, building society or loan company, allowing the borrower to be lent a specified amount of money according to certain terms and conditions. The loan is usually dispensed as a lump sum and then repaid by monthly instalments. Personal loans usually start at about £500 and can go up to and beyond £20,000. You will agree to pay back your loan over a pre-determined period of time, referred to as the term of the loan, in monthly instalments. Loan terms can vary between six months and twenty-five years; but it depends on the individual lender as to their requirements and conditions.

When you pay back your personal loan you will not only pay back the amount of money that you originally borrowed but also a charge for the service you have been provided with. This charge is calculated as a percentile of the borrowed amount and accrues with the length of time for which the money is borrowed. This is called interest. When looking at advertised loans you will have noticed this acronym - APR. These letters stand for 'annual percentage rate'. The APR is a percentile figure representing the interest charged on the loan in addition to any supplementary fees that may have been charged on it such as arrangement fees. Learn more about APR here.

UK personal loans are usually available for almost any purpose. You might want to help fund that dream holiday, pay for an extension on the house, or buy a car. Personal loans are available for almost any amount you require, though lenders will usually only provide loans between certain brackets- so you will need to find a provider that suits your needs. Repayment periods also vary, usually between six months and a decade. Usually it follows that the higher the amount that you borrow, the lower the interest, but interest rates can vary hugely according to both the type of loan and provider. Whatever your needs, there is bound to be a personal loan to suit you. Some loans even allow for flexible repayments- allowing you to make under- or over-repayments to suit your financial situation.

Read more about UK personal loans