About Personal Loans
Personal loans are loans that can be taken out for any reason and regardless of credit histories or home ownership. They are smaller loans, no more than £1500 at most on average, but they can be used for anything from paying back bills to covering a house payment to putting a down payment on a car - even taking a short vacation.
Personal loans are made specifically for people that have had financial struggles in the past or not a great deal of money to their name, but are going to be making money in the future (as evidenced by their full time, salaried job). They are not considered low-risk loans per se, but their lower dollar values combined with almost guaranteed income makes them far more likely to be handed out regardless of credit histories and home ownership.
There are very few requirements for a personal loan. The borrower must be over the age of 18, and they must have had a full time, salaried job for at least 6 months.
Although they are not low-risk loans, their short time periods and generally smaller loan amounts mean that borrowers are subjected to some incredibly high interest rates compared to other types of loans. The lending agencies are trying to make as much money as possible in what little time they can, and they will try to charge as much as they can to do so.
Also, many personal loans are emergency (need based) loans, and some lending agencies try to take advantage of people's dire need for a loan by offering them an even worse rate and some additional fees that are unnecessary. Luckily, because these loans are also very competitive, you can avoid this risk by comparing personal loans before you get them. When you force lenders to fight to offer you the loan, you will be far more likely to save on interest rates and fees as these lenders compete to give you the best deal. If you hastily choose a lender, you are much more likely to end up taking a worse deal than necessary.
Personal loans are meant to help people that need a small, short term loan right away and do not necessarily have the credit or collateral to get it themselves. As long as you search around before getting one, you can get a decent deal on your personal loan.