What are the charges when taking out a loan?

A personal loan is a lump sum that you borrow for fixed number of months (called the 'term'). 

Interest Charges
You pay interest at a fixed rate on the amount you borrow. All the interest charges throughout the term of the loan and the repayment of the amount borrowed are added together and then divided into equal monthly payments.

Arrangement Fees
There may be an arrangement fee when you take out the loan.

Payment Protection
You normally have the option to pay extra for payment protection insurance. This pays your monthly payments for you if you are unable to work because of illness or unemployment. 

Early Repayment
You can pay off a personal loan before the end of the term. Often, there will be a charge equal to part of the interest you would have paid had you kept the loan for its full term. This is known as an early redemption penalty.

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