David Kuo, head of personal finance at Fool.co.uk, explained that a flexible personal loan can allow people to save money in the long run.
He said: "The option of flexibility will allow a borrower to repay a loan earlier, and cut the total cost of the loan. By avoiding secured loans borrowers will ensure that their home is not put at risk."
Mr Kuo added that people should compare the cost of different personal loan products using the total amount repayable, rather than the annual percentage rate.
According to research by Moneyfacts, personal loan rates have increased by an average of 1.7 per cent over the past year.
It also found that there have been 27 interest rate changes on personal loan products so far in 2008.
According to Credit Action, total secured lending on homes is currently around £1.2 billion.
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