Ask if there are penalties if the loan is repaid early. Consider what security may be required, e.g. insurance, guarantees etc. There are a number of broad categories of loans available, each with different characteristics. Personal or term loans Banks, building societies, finance houses or credit unions all provide similar loans. However, the associated costs can vary from institution to institution.
Personal loans are usually for fixed terms with regularly scheduled repayments.
When interest rates are low, it can be advantageous to agree a fixed interest rate. An Ordinary term loan refers to a personal loan with a variable interest rate. As interest rates change, repayments may increase or decrease. The advantage of such a loan is that there are usually no penalties for early repayment, unlike fixed interest rate loans. An overdraft facility enables current account holders to write cheques or use their debit card up to an agreed limit even with insufficient cash in the account.