A quick guide from Norton Finance to taking out a personal loan

A personal loan, as the name suggests, can be used for any personal expenses, whether its home improvements, a new car, or a holiday. Here, Norton Finance explains what’s involved in taking out this type of loan.

For personal loans, you can typically apply for anything up to £15,000, although there are some lenders who may be willing to offer £25,000 as the maximum amount. The repayment period will vary from one lender to another, but can range from between six months to seven years. However, if you only need to borrow money for just six months, then Norton Loans recommends that you opt for an overdraft or a credit card instead, as personal loans can be more beneficial for those who wish to pay back the amount over the course of a year or more.

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Building societies, banks and loan companies can all provide personal loans, but will differ in terms of the interest rates they offer. Try not to be too tempted by a low interest rate – make sure to take other factors, such as early repayment charges and the length of the repayment period into account as well. Most personal loans come with a fixed, as opposed to a variable, rate of interest. This means that you will always know exactly how much you have to repay every month, and you don’t need to worry about your monthly payment rising unexpectedly at any point during the repayment period. According to Norton Finance, most lenders will require you to set up a direct debit for your payments.

Virtually every lender will carry out a credit check before deciding whether or not to offer you a loan; this will tell them how much of a risk you present, based on your past history of keeping up payments. Although Norton Loans say that a poor credit record does not automatically mean that you will be refused a personal loan, it may make it more difficult, and you may end up paying a higher rate of interest, than another person with a good credit record. Additionally, those who work on short term contracts, or who are self-employed might find it more of a challenge to get a loan.

Personal loans are rarely, if ever secured; this means that if you find that you are unable to repay the amount owed, the lender has no right to repossess your house. This is one of the reasons for the relatively high interest rate associated with personal loans – the lender is taking a bigger risk than they would if they offered a secured loan.

Norton Finance discusses the process of remortgaging

One of the best ways to cut down on costs is to remortgage; depending on how much you’re currently paying, you could save a few hundred pounds each month, as well as several thousand pounds on your mortgage overall. However, remortgaging can be complicated, and it’s a good idea to know what obstacles you might face along the way. Here, Norton Finance explains some of the things you need to know before you begin the process.

Like many things in life, remortgaging your home will most likely take longer than you expect it to. Because of this, it might not be the best option if you’re hoping to quickly cut down on your current expenses. As a general rule, it will take between one and two months, although the exact timescale will be dependent on the type of mortgage product you opt for, and whether or not you decide to change to another lender. There is also the possibility that your personal financial circumstances may result in complications with the application, which could delay the process even more. However, if you’re aiming for long term savings, Norton Finance believe that it’s a great option.

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If you decide to go ahead , it’s best to initially check what your existing lender is willing to offer; if they believe that they may lose your custom, they may consider providing you with a more competitive mortgage deal, and furthermore, the process is likely to move along a lot faster than if you switch to a new lender. Once you’ve spoken to your lender, you should then compare their offer with other lending institutions. This may be a little time consuming, but Norton Finance say that it’s important, as you may find a significantly cheaper deal if you shop around.

Another important factor to keep in mind, Norton Finance add, is that you will incur fees when your remortgage, and these need to be taken into account when you’re considering whether or not switching is worth it. These will be mentioned in the application, along with the rest of the terms and conditions; Norton Finance recommends that you go through this information carefully, so as to make sure that you know exactly what you will be committing to. Remortgaging is something you will most likely only do once, so it’s crucial that you take the time to understand what kind of agreement you are entering into.