Personal Loan Online

Before applying for a loan, you need to find out what rate of interest is applicable and normally you need to have someone to back you up in case of missed payments.

Ask to pay your money back in small manageable payments.

You can also ask to have all your existing loans and monthly bills to be put together into one payment to make things easier for you.

Before they let you borrow their money, lenders will want to make sure that you are likely to pay them back. They will ask a credit reference agency to check on you before they decide whether to give you credit or not.

The lender will ask you to complete a credit application form and then you will be given a credit score based on your answers.

Whatever personal loan arrangement you come to, check out the payment protection insurance (PPI) that is offered. Loan providers are keen on PPI as it represents £6 billion a year to them. Do you really need it? Do you have other insurances which will cover personal loan repayments in the event of accident, sickness or unemployment? If you're self-employed you are typically excluded from most PPI policies anyway.

Note that the Post Office has now entered the market with a PPI stand-alone policy, that is better than many major high street lenders on both cost and the level of cover, although critics are concerned about its 30-day termination clause.

Consumer expert Karen Kay joined Ray Watson from the OFT and Ashley Holmes from Finance and Leasing Association live online to give us their top tips on managing credit. Check out the OFT site by clicking the link below.