Guide To Loans - Personal Loans | Ulster Bank

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A guide to loans

Helping you understand the basics

Lots of lenders offer loans. There are a few key things to look out for when comparing products.

Personal (unsecured) loans

What is it?

Personal loans, sometimes called unsecured loans, are issued by banks and other financial companies. It is different from an overdraft or credit card because it allows you to borrow a fixed amount over a fixed term, usually at a fixed rate of interest.

 

A few things to consider:

- This type of borrowing is available from a choice of lenders and is most commonly for amounts between £1,000 and £25,000 (amounts can differ depending on the lender)

- The loan is not secured against your home, and therefore may be suitable for a wider range of people and circumstances

- It is available to those who meet the lender's criteria (a key criteria being a minimum age of at least 18)

- The amount of interest you'll pay depends on the length of time you want to spread the repayments over and the amount you're borrowing. Sometimes it's also affected by your credit score or financial history.

Ulster Bank personal loans

Secured loans

What is it?

These are loans that are secured against your home or other property. They are only available to people who own or have a mortgage on their home or property and who have enough equity in the property to secure against the amount they want to borrow.

 

A few things to consider:

- If you take a secured loan, you're agreeing your home or property can be used as security against the debt. Put simply,if you miss payments and slip into arrears, your home or property could be repossessed.

- Some lenders may give a better interest rate on a secured loan, especially if you're borrowing larger amounts. However, you should compare all types of loans from a range of lenders before taking one out.

Visit us in branch for more information or to apply for a secured loan.

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Payday loans

What is it?

A payday loan is designed to be taken out over a short period of time. Typically they are advertised as a means to fund unexpected purchases that arise a few days before the end of the month, when you are strapped for cash and waiting for payday. You should only ever consider taking out one of these loans if you're certain you can pay it back quickly.

 

A few things to consider:

- Payday loans can be very expensive. If you're late in paying back the loan, further charges and interest will apply.

- Make sure you are aware of all fees and charges, and understand what could happen if you miss payments.

Ulster Bank do not offer payday loans.

Things to look out for when considering a loan

 

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Icon expand Look carefully at the rates

If two loans have the same APR, but are repayable over different lengths of time, the total cost will be different. The APR includes the total interest and other charges, per year. So if one loan is to be paid back over a longer period of time, that loan will cost you more in interest.

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Icon expand Make sure you can afford the repayments

The APR covers the cost of the interest and charges, but make sure you know the actual amount you'll be repaying each month, and whether the rate is fixed or variable. If it's variable it could go up as well as down. If repayments are higher than you can commit to, you could think about extending the length of time you take to repay the loan. This will give you lower monthly payments, but will probably cost you more overall as you'll be paying more interest.

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Icon expand Be aware of all the charges

There can be more to the cost of a loan than the interest. Check if there is a penalty if you choose to repay the loan early. Sometimes there's a hefty interest charge or admin fee on the last month's payment. And, if you're late paying, because a Direct Debit bounces, for example, you may be charged by the loan company and your bank. So make sure you know about all charges up front.

Personal Loans Find out more
Ulster Bank personal loans
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