Personal loan debt
Taking out loans to cover debt payments is one of the five debt danger signs
A personal loan is when you borrow a fixed amount and have fixed repayments.
You know how much you need to pay back each month, and how long you need to make the payments for.
Interest is charged on most loans. The rate of interest will depend on a number of different factors, including the amount of money you’re borrowing, the term of the loan and your credit rating.
Most personal loans are unsecured, rather than secured. This is an advantage as it means the loan isn’t secured against your home.
Loan repayment period
If you take out a loan over a long period of time you may find that the payments seem lower. But the longer the period of time you borrow the money for, the more you’ll pay back in interest. Taking a loan out over 10 years might lower the monthly payments, but do you still want to be paying the loan back in 10 years time?
Payment protection insurance(PPI)
If you take out a loan, it’s likely that the lender will offer you PPI. This protects you if you can’t make your monthly payments because of an accident, sickness or unemployment. PPI will add an extra cost to your loan repayments. It may be cheaper to get PPI from a different company than the lender you are getting the loan from. If you’re considering taking out PPI you should always shop around for the best provider.
If you already have PPI on a personal loan you should check your agreement. A lot of PPI policies were mis-sold as they didn’t cover certain people or situations. Step Change’s money aware blog will help reclaim PPI for free.
We can assist you…
If you’re struggling to pay your loan, or any type of debt, we’ll be able to help you. We can assist you to with this online Debt Remedy tool Or, if you’d prefer to call us, then please call us on 07541978789 to speak to one of our volunteers who will help you get your situation back on track and get free debt information that is tailored to your individual situation.