A loan is money that you borrow and agree to pay back over a set period of time with interest. The amount of money you borrow is called principal, and interest is cost for borrowing money. The length of time set to pay back loan is known as term. It is best to get a loan only for very large purchases or in an emergency. Getting a large loan or getting many loans that you can't pay back can cause huge financial problems, because it can get very difficult to pay them back each month.
There are many benefits to getting a loan. A loan gives you money you need to pay for something big like a house, a car, college tuition, or major home repairs when you don't have cash to cover purchase. Most people could not afford to do these things without loans.
Loans come in a variety of shapes and sizes each performing a different function and having different interest rates. Loan rates are variable, depending on status.
Loan repayments will depend on amount borrowed and term. Loans are taken out with selected, reputable institutional money lenders.
Depending on type of loan chosen you can borrow anywhere from £500 to £1,000,000 and can repay it over a period of between six months and twenty-five years.
Nowadays, it is quite easy for most people to qualify for a loan of one sort or another even if they have a bad credit history. Loans can be applied for in person, by telephone or more commonly now, over Internet.
Loans can be used for any purpose. A loan can help you with home improvements such as a new kitchen or bathroom, that once-in-a-lifetime holiday, your dream car or repaying debts to reduce your monthly outgoings to a more manageable amount.