A Personal Loan is a method of borrowing a lump sum of money from a bank, building society or other financial institution to finance buying of a new car, make home improvements or go on a luxury holiday.

Personal loans have become a popular way of raising much-needed funds for personal use Personal loan amounts vary from between £500 to £25,000. Normally, you'll receive a lump sum.

In return, you agree to make regular repayments, usually monthly. Assuming you've taken out a repayment loan, which will usually be case, some of money you repay will go towards servicing loan and rest of your payment will be used to pay off capital and reduce outstanding debt.

Home improvement loans provided by loans companies are secured on value of borrower's property. The amount available to borrower is subject to equity in their property and their ability to repay home loans when their outgoings and other loans are taken into account.

A home improvement loan is one that is issued by lender on basis that you use amount of loan to make improvements to your home that will increase market value.

Typically a home improvement loan is offered by your existing mortgage lender, where equity value in house acts as security for lender. Where this is case, amount you can borrow may be determined by amount your improvements will add to market value of your home.

Home improvement loans can be arranged at same time as you are buying property. This is as long as total amount of mortgage and home improvement loan will not exceed value of property.

The reason why you would want to get this loan from your mortgage lender is that you may be able to obtain same interest rate on loans that you are paying on your mortgage, which cannot be beaten with a personal loan.