Top tips to help you make sure that you are taking the right decision.

Making the decision to take out an unsecured personal loan is important. A loan is a financial commitment that will last for years, so you have to make sure that you get good value for money. Therefore, a certain amount of planning and researching is necessary.

1. Make sure that an unsecured personal loan is really what you need. You may want to consider a credit card or an overdraft instead if the amount you need is not big enough to qualify for low APR (Annual Percentage Rate) deals; if you want more flexibility in how much you repay. You may want to consider a secure loan if you want to loan a large sum.
2. Decide how much you want to borrow. Once you have made that decision you can start looking for the company that offers the best deal for the amount you want to borrow.
3. Decide how long a period you wish to repay the loan over. Loan companies will provide you with different repayment periods. There are companies that offer a one to ten years repayment period, while other companies only offer a one to five years repayment period.
4. Consider your personal circumstances. If you are self employed, have a poor credit rating or no rating at all, some companies, which are very selective when choosing clients, will not approve your application. Others may be more flexible but they will charge higher rates.
5. Shop around for reputable loan companies to find the best APR, especially if you are in an advantageous situation.
6. If your application has been turned down you can ask why this happened. It’s not sure you will get an answer as they are not obliged to divulge the reasons behind their decision but it’s worth a try.
7. When shopping around for loan companies ask if they offer bonuses such as repayment holidays. You should also find out which are the penalties associated with personal loans for each company, including early repayment charges.  
8. Ask about the payment protection insurance. Some companies offer it alongside a personal loan, and some charge a lot for this insurance.