Loans - more loans

What does APR mean?
This stands for the annual percentage rate. This rate takes into account all the costs, interest charges and arrangement fees and allows you to compare credit facilities, like loans and credit cards on a like for like basis.

What's the interest rate?
An interest rate is the amount, usually given as a percentage, that is built into your repayments over the term of the loan. This is the charge that is made by the lender for letting you borrow the money. Each month you repay the interest for that month and a proportion of the outstanding debt until you eventually repay the debt in full.

How long can I repay it over?
You can normally repay your loan over 6 months to 10 years, and sometimes longer. If you choose a fixed interest rate, fixed repayment loan, you pay it back with fixed monthly payments. If you choose a flexible loan, you pay back a percentage of the balance outstanding or a minimum amount each month.

What happens if I struggle with repaying my loan?
If you think you're beginning to struggle with repaying your loan, the first thing to do is to speak to your lender. For more information take a look at our coping with debt section.

What is payment protection?
You'll often be offered payment protection insurance when you take out your personal loan.

Payment protection insurance covers your monthly repayments on a credit card or loan if you lose your job or are too ill to work. Generally, with a loan, your monthly payments will be paid for a set time and, with a credit card, your minimum monthly payment (usually 3-5 per cent of the outstanding balance) will be paid, again for a set time. There is no obligation to take this out.

Look at our income protection section, in the Getting insured chapter for more information on different types of insurance to help you cope financially if you couldn't work due to illness or were made redundant.

What if I want to pay off the loan early?
If you want to pay off your loan early, you can ask your lender to give you a repayment figure. Some lenders may charge you penalties for repaying your loan early.