Bank Loan

The old name for a personal loan, banks might still be a place to go.

A bank loan is what your parents would have called a personal loan- and they'd have worn a tie to go and get one. These days, borrowing is much easier, and can be done in five minutes online. You don't have to go to a bank (even supermarkets can lend you money); in fact banks are often the least keenly priced.

These days there are plenty more places than a bank to go for a bank loan. Supermarkets like Tesco and Sainsbury's all offer loans, and there are specialist lenders for flexible or bad credit loan products.

However, a huge proportion of people do still go to the bank where they hold their current account to get a loan. Sometimes of course, this is just laziness- it's very rare indeed that a bank loan offers you a better rate than you could find elsewhere (although for some specific needs, HSBC for example has some innovative products). Until we become more demanding, there's no incentive for the banks to reduce their rates while we keep walking through the door.

To balance that opinion, there is an argument that the high street banks are actually the most responsible lenders. Even fairly bad debtors can obtain £5,000 with one phone call today; and part of the reason that banks are expensive lenders is that they usually require a meeting with a branch manager to approve the bank loan. This will take your credit history with the bank into account. It's fair to say that many internet-only operations are falling over themselves to give you money, irrespective of whether you'll be capable of paying it back.

So, a bank loan is likely to be on the expensive side in terms of interest payments; but you will probably get a better class of financial advice- and that's worth something.