Simplifying personal loans: A comprehensive personal loans guide

This guide explains how personal loans work in Ireland, the main loan types, what lenders may consider, and the costs and questions to review before you apply.

What is a personal loan?

In simple terms, a personal loan is money borrowed for personal use and repaid with interest over an agreed period. Most personal loans are unsecured, so an asset such as a home or car is not normally required as security. Eligibility, the rate offered and the amount available depend on the lender’s criteria and the applicant’s circumstances.

These loans can be quite versatile, allowing you to borrow money for a range of purposes, such as consolidating debt, financing home improvements, covering medical expenses, or funding a major purchase, like a car. The loan is repaid in regular instalments each month for a set period, generally ranging from one to ten years, depending on the loan type, the term you choose, your repayment capacity, and the lender’s terms and conditions.

What types of personal loans are available?

Personal loans may have a fixed or variable interest rate. The key difference is whether the interest rate, and potentially the repayment amount, stays the same or can change during the loan term.

Fixed rate loans compared with variable rate loans

If you’re looking to get a personal loan, then there are two main types of loan available to you. It’s important to know the difference between each.

1. Fixed rate loans keep the agreed interest rate unchanged for the loan term, which can make scheduled repayments easier to plan for. Fixed rate loans are particularly beneficial in times of economic uncertainty when interest rates may rise unexpectedly.
2. Variable rate loans have interest rates that can change based on market conditions. With variable loans, no matter the interest rate, there is always a risk that the rate could rise and with it your monthly repayments.

For more information, check out our guide to fixed vs variable rate loans. Always check the specific loan terms, fees and early-repayment conditions before deciding.

How do personal loans work?

Understanding how personal loans work is crucial to making your borrowing experience simple. Our aim with this personal loan guide is to do just that. Here’s a clear breakdown of how they work:

1. Loan application: You begin by applying through a bank or financial institution. The lender will assess your credit history, income, and other financial factors to determine your eligibility. Fortunately, most loan applications can be done online, saving you time. For example, Avant Money has a fully online loan application process, making it easy for applicants.
2. Loan offer: If approved, the lender will offer you a loan amount with specific terms. This will include the interest rate, loan term, and monthly repayment amount.
3. Repayment: Once you accept the loan offer, the funds are usually transferred directly to your chosen bank account. You’ll then make monthly repayments according to the agreed schedule until the loan is fully repaid.
4. Completion: After all the required repayments are made, the loan is paid off.

The exact application and approval process varies by lender. An application is not a guarantee of approval, and the rate or amount offered may differ from the amount requested.

What should first time borrowers know before taking out a personal loan?

Before applying, decide how much you genuinely need and whether the repayments would remain manageable if your income or expenses changed. Compare the full cost rather than focusing only on the monthly repayment.

Questions to ask yourself before applying

• Do I need to borrow now, or could I save towards the cost?
• What is the smallest amount I need to meet the purpose?
• Can my budget comfortably cover the repayment each month?
• What is the APR and total cost of credit?
• How does a shorter or longer term affect the monthly repayment and total interest?
• Are there fees, restrictions or early-repayment conditions?
• What could happen if I miss a repayment?

The CCPC personal loans guidance provides independent information on how personal loans work and what to compare.

Personal loan frequently asked questions (FAQs)

The most common answers to people's personal loan questions are rooted around the importance of comparing the amount you need, Annual Percentage Rate (APR), total cost of credit, loan term, repayment amount, fees, flexibility and early-repayment conditions. You should borrow only what you can afford to repay, allowing room for unexpected costs. These FAQ’s include:

How much can you borrow for a personal loan?

Different lenders will have different lending policies which may also take into account the loan purpose. Avant Money for example, offers personal loans from €5k to €75k at a fixed interest rate for your entire loan term. The amount you can borrow will be based on a number of different factors including your income and repayment capacity. It is important that for the loan amount and term requested, that you can clearly show capacity to meet the regular repayments and that your bank statements evidence this. The lender will consider the interest rate, overall terms, and your future capacity to repay or any likely change in situation when considering your loan application.

What do you need for a personal loan?

Requirements vary, in order to apply for a loan you must be over 18 and a resident of the Republic of Ireland. Lenders commonly ask for identification, proof of address, proof of income including bank statements and pay slips, proof of PPSN, and information that helps them assess affordability and credit history. Review the lender’s current document list before applying to avoid delays. The exact documents required will vary by lender.

How to qualify for a personal loan?

There is no single credit score used by all lenders in Ireland. Lenders assess applications using their own criteria and may review income, regular expenses, existing commitments, repayment capacity and credit history. A lender must assess whether the proposed repayments appear affordable. You can apply for your credit report free of charge, subject to fair usage, through the Central Credit Register borrower area.

Can you pay back a personal loan early?

Early-repayment rules vary. Check whether the agreement allows extra repayments or full early-repayment, and whether any charge, interest or notice requirement applies. Avant Money, for example, offer the ability to repay your loan early without any additional fees or penalties.

You can find more personal loan information in our extensive personal loan FAQ page, answering all your loan questions.

How does a loan term work?

The loan term is the time over which the borrowing is scheduled to be repaid. The term affects both the repayment amount and the total interest cost. When comparing options, look at the total amount repayable as well as the monthly figure.

What is an unsecured personal loan?

An unsecured personal loan does not normally require an asset to be provided as collateral. This does not remove the obligation to repay. Missed repayments can lead to charges, affect credit history and result in collection action under the agreement.

How do personal loans work in Ireland?

You apply for a set amount and term. The lender assesses the application, including affordability and credit history. If approved and accepted, the funds are paid as agreed and repaid in instalments that include the amount borrowed and interest. The exact rate, documents, timing and conditions depend on the lender and the applicant’s circumstances.

How many years is a personal loan?

A personal loan term is the period agreed for repaying the loan. Available terms vary by lender, loan purpose and amount. A longer term can reduce the scheduled monthly repayment, but it typically increases the total interest paid because the borrowing lasts longer. A shorter term usually means higher repayments but a lower overall interest cost.

How long does personal loan approval take?

Approval times vary depending on the lender, the application and whether all required documents are supplied. Additional checks or missing information can affect the process. At Avant Money, once you submit your application, we assess the loan application as quickly as possible.

Advantages, disadvantages and key considerations of personal loans

The best fit is not necessarily the loan with the lowest monthly repayment. Compare APR, total cost of credit, term, fees, repayment flexibility and the consequences of missed repayments alongside the amount you need.

Potential advantages of a personal loan

Personal loans offer advantages that make them an appealing choice for many borrowers compared to alternative finance products:

• Freedom: Personal loans can be used for almost any purpose, from doing work on your home to unexpected medical bills, giving you the financial freedom you need.
• No collateral required: As most personal loans are unsecured, you don’t risk losing any assets, like your home or car, if you’re unable to repay the loan.
• Predictable: If you choose a Fixed Rate Personal Loan, then your monthly repayments are fixed making it easier to manage your budget.
• Debt consolidation: If you have multiple high-interest debts, such as credit card balances, you can consolidate them into a single Personal Loan with a lower interest rate. This not only makes your payments easier, but can also save you money on interest over time.

Potential disadvantages of a personal loan

• Interest and any applicable fees increase the total amount repaid.
• Missed or late repayments may result in charges and may affect your credit history.
• A longer term can make monthly repayments lower while increasing the overall interest cost.
• Borrowing more than needed can place unnecessary pressure on a household budget.
• Fixed rate and variable rate loans may have different flexibility and early-repayment conditions.

Is a personal loan right for you?

A personal loan may be suitable where there is a clear purpose, a defined amount and an affordable repayment plan. It may be less suitable for ongoing everyday spending, business purposes, buying a home or investing. Product restrictions and lending criteria vary, so check the lender’s terms.

If repayments or existing debts are difficult to manage, MABS provides free, impartial support with budgeting and problem debt.

Key considerations when choosing a personal loan

Before taking out a personal loan, it’s important to consider the following factors:

• Interest rates: The interest rate is one of the most critical aspects of any loan. A lower rate means lower monthly repayments and less paid in interest over the life of the loan. It’s essential to shop around and compare rates from different lenders.
• Loan term: The loan term, or the length of time you have to repay the loan, can significantly impact your monthly repayments and total cost of interest. While a longer term may result in lower monthly repayments, it often leads to higher overall interest costs. In contrast, a shorter term may increase your monthly repayments but reduce the total interest paid.
• Fees: Be aware of any additional fees which different lenders may apply associated with the loan, such as late payment fees. These can add to the overall cost of the loan.
• Credit history: In Ireland, lenders review credit history rather than relying on one universal credit score. Check that your Central Credit Register information is accurate before applying and contact the Register if information appears incomplete or incorrect.

Tips for simplifying the loan process

To make obtaining a personal loan as easy as possible, follow these tips:

• Use online loan calculators: Many lenders offer online tools that allow you to estimate your monthly repayments and total loan costs based on different loan amounts, terms, and interest rates. These calculators can help you determine what you can afford before you apply. Why not try Avant Money’s Personal Loan Calculator to see how much you can borrow.
• Check your credit report: Before applying, review your credit report to ensure there are no errors that could impact your loan application in a negative way. Correcting any errors before applying can help your chances of getting a more attractive loan. You can apply for a credit report for free (subject to fair usage) directly with the Central Credit Register.
• Ask questions: Don’t hesitate to contact lenders with any questions about the loan terms, fees, application process or any extra personal loan information you need.

Personal loans at a glance

• A personal loan provides a set amount that is repaid with interest over an agreed term.
• Fixed rates offer repayment certainty; variable rates can change during the term.
• Compare APR and total cost of credit, not just the monthly repayment.
• Choose an amount and term that remain affordable within your budget.
• Check fees, early-repayment conditions, permitted purposes and the lender’s current criteria.
• Review your credit report and prepare required documents before applying.

Personal loans can be a valuable tool when used in the right way. By understanding the basics of what a personal loan is, how they work, looking at the different choices available, and carefully considering your needs, you can ease the process and find a loan that fits your financial situation.

If you’re interested in a loan, Avant Money offers Ireland’s best fixed rate on Personal Loans over €30,000* at an APR of 6.1%. So not only do you have the peace of mind of knowing your loan repayments will be the same fixed cost each month, but you also know that it’s at the best fixed rate in the country*.

*Rates and loan terms are correct as of 1st September 2026 and are subject to change (Source: CCPC.ie, not including Green Loans). The Maximum APR (Annual Percentage Rate) on all Avant Money loans is 19.9%. Minimum loan term is 12 months, and maximum term is 120 months. Loan terms vary depending on the purpose of the loan. Terms greater than 84 months up to a maximum of 120 months are only available for Refinance and Home Improvement loans of €20,000 to €75,000.

Representative example:  On a €30,000 loan over 5 years, at a fixed rate of 5.9% (6.1% APR) you will pay €578.59 a month. The total cost of credit would be €4,715.41 and the total amount repayable would be €34,715.41.

Lending criteria, terms and conditions will apply. Personal Loans are available to residents of the Republic of Ireland over the age of 18 and are subject to repayment capacity and financial status. Proof of income and a credit reference agency search will be required to help us approve your request. Personal Loans are unsecured and not available for business purposes, house purchase or investment.

Our interest rates vary depending on the value of your loan and credit profile. We will assign you the appropriate interest rate once your application has been reviewed. To find out more about the loan values and applicable interest rates, check out our rate table at Avant Money Personal Loans

Bankinter S.A., trading as Avant Money, is authorised by the Banco de España in Spain and is regulated by the Central Bank of Ireland for consumer protection rules.