The purpose of a loan is to give the beneficiary a large capital sum and stage repayments. Banks and lenders see staged payment as not only a reduction in risk which allows indebted clients to budget and plan for a fixed monthly outgoing, but also a way to pretty much guarantee interest payments for the issuing bank. It is not too difficult to switch a loan to a new provider but if you do, you may have to pay a redemption fee so it is always worth checking out before you get a loan if there is a fee associated with early repayment or over payment if you plan on making any.
Some lenders are now offering flexible loans. As with flexible mortgages, these products can be ideal for people who receive irregular income such as dividends or bonuses as it allows them to save on interest payments by paying into them and potentially drawing down again if they need to in the future.
When taking out a loan you should check to see if there is a fee for early repayment if you expect you may do this. It is also worth checking that this is the best way to finance your spending as taking out a loan requires regular commitment. If you get a good rate the interest charges could be minimal but the more debt you have the less you can borrow, so if you need to borrow large amounts having a lot of loans can put you in a weaker position.