Personal loans make no discrimination. It is available to the prince as well as the pauper. In simple terms, everybody is eligible for it. These loans are either secured or unsecured. Secured loans require collateral from the borrower – a valuable asset that can be kept as security against repayment failure. Conventionally, they have lower interest rates. With unsecured loans, the collateral is missing. Consequently, the interest rates are higher. With secured loans, the loan limit is greater. Also, the repayment term is longer.

These are a few places where you can get a personal loan in the UK:

High street banks
Supermarkets, post offices and shops
Online Banks
Lending and borrowing exchanges

High street banks and building societies are the accepted way of taking out personal loans in the United Kingdom. These lenders have offices in every town. High street banks generally tend to charge more than online banks. UK supermarkets, post offices and shops are beginning to come up with their own financial products. This can be handy as you are shopping for personal loans along with other products. With online lenders, the overheads are lower. Online banks have the lowest rates going around. The loan companies provide invaluable advice over the phone. A stark advantage here is that the borrower does not have to be in UK to manage the loan.

Borrowing and lending exchanges also offer lower costs on personal loans. They manage this by cutting out the middle player and other added costs that render high street bank loans a somewhat expensive option. Here, people can lend and borrow directly from one another. Their lenders and borrowers have a contract with their respective borrowers and lenders. The exchange looks after the collection of monthly repayments. Should repayments not happen on time, the recovery process is the same as the one used by high street banks. To alleviate the risk further, borrowed amounts are loaned and spread between somewhere around fifty lenders and borrowers.