Choosing an ideal loan option for your individual needs
If you're looking for a personal loan that can meet your needs and is also affordable, our collection of lenders will fulfill your needs. Select your pick from our range of affordable and flexible personal loans offered by the leading lenders in the UK.
What can I use a personal loan for?
Personal loans can be used to take care of a variety expenses such as medical bills, school fees, holiday costs, or buying a vehicle. Personal loans are typically unsecured loans but can also be secured.
They make it easy to borrow the amount you need and repay a fixed amount each month, for a set period. It's important to first shop around to look for the most suitable loan for your needs.
Only take out a personal loan when you're truly in need of it. Not only can personal loans negatively affect your credit rating if you are unable to meet your minimum repayments but they can put you in serious long term debt.
Annual growth of personal loans and overdrafts delivered by the United Kingdom's leading high-street banks increased by 3.8% from May 2018 to May 2019. The latest household debt update revealed that the prevalence of personal loans increased by 14.0% in December 2019 when compared to the same period in 2018.
The two defining features of personal loans
- Complete purpose flexibility - a personal loan gives the borrower full freedom to use the money for any purpose they want. Unlike a home or car loan which requires the money to be used to buy a property or a vehicle respectively. Personal loans allow you to have full control over how you use your money.
- Lack of collateral is okay - personal loans can be unsecured, which means you're not required to have collateral when applying for it. This specific feature makes it more attractive to some customers who may not be able provide collateral.
How to secure the best personal loan in the UK?
- Review your credit history before you apply - review your credit history regularly to identify the potential theft of your identity, to ensure listed items are correct and to be aware of your credit standing.
- Always shop around - avoid approaching a single high street lender and accepting the very first deal that you’re offered. Rather seek help from a broker as they act as a knowledgeable middleman that can connect you with many providers and offers at once.
- Always compare the total cost of the loan by looking at the APR - when you're in the market for a loan, you are looking for the best interest rate deals you can find. And this will be shown by the APR rate of a product which includes the interest rate as well as any fees.
What are the benefits of a personal loan?
- They offer larger loan amounts than other credit products such as short-term loans and credit cards
- They are easy to manage since your repayments will be fixed monthly
- Interest rates will be tailored to your individual credit profile
- You can select your loan term. Selecting a higher repayment will allow you to pay the loan off quicker, while lower, repayments stretch out the term over a longer period, resulting in a higher overall loan cost
- Can be used to consolidate your debts which will reduce your monthly debt payments
- You can make over-payments to repay your debt off faster and save on interest
Things to know before you apply for a personal loan
1) Personal loans have a cooling-off period
Every personal loan in the UK is accompanied by a 14-day cooling off period. A cooling-off period allows you to cancel the loan agreement if you change your mind about taking out a loan. You'll get 30 days to repay the credit, and you’ll only be charged the interest that applies to that period.
2) Loan insurance products may be a life saver
Loan insurance is important since it takes over your loan repayments when you are no longer able to keep up with repayments due to unforeseen circumstances. Conduct your research thoroughly and always be clear on how much the coverage in question will cost.
3) You must be able to afford the repayments now and in the future
List all your expenses to understand your current financial standing and how a personal loan will change your finances. Don't only consider your present but your future too as some personal loans may have very long repayments terms.
4) You don’t always get the advertised APR
The APR’s you see on adverts show the ‘representative’ APR which is the rate that applies to 51% or more of applicants, so you may not qualify for the advertised rate if you do not have an excellent credit rating.
Factors that influence personal loan approval
- You should have a good credit score. A good credit score increases your chances of getting your loan approved.
- Your employment status is also a significant factor in the loan approval process. You should have a steady job.
- The higher your income the more you will be able to apply for. Those on benefits and low incomes may have difficulty being approved.
Who can apply & what is required?
Before you attempt to apply for a loan you should confirm you meet the basic criteria required by lenders. You must be a UK citizen that is over 18 years. Your lender will ask for a photo ID, proof of residence and proof of employment.
Apply for you ideal personal loan in minutes
A personal loan is a loan designed to simplify your life and enable you to reach your goals. It is easy to get a personal loan since most lenders have online portals and apps which allow customers to make a quick online loan application.
When you apply for a personal loan, there is not much paperwork required and even your loan agreement can quickly and easily be completed online. In addition, when you use the right loan comparison site, you can get hold of the most competitive loan deals in the UK.