There are 2 main types of loans available, these are secured loans which are secured against an asset as a security (typically a property or a car) or an unsecured loan which means nothing is secured against the loan value.
What is a personal loan?
A personal loan is also known as an unsecured loan, you are not required to offer any security on the loan and the loan value. The loan value is a fixed amount and is typically between £1,000 and £30,000 from a bank or lender and the repayment period is usually between 1 and 7 years. The rates are usually fixed for the duration of the loan contract, although on a few occasions the rate can be variable meaning your payments can go up or down during the length of the contract.
Do you need money without securing it against your property? If you are looking to consolidate your debts, pay for a wedding or making a large purchase then a personal loan could help. Compare lenders here
Do you need a loan but have a bad credit history? By asking a friend or family member with good credit to be your guarantor it could help to lower the interest rate (APR). Compare guarantor loans here
If you have an unexpected bill then a short-term loan could help. The loan has a lower value and is payable over a shorter period of time but it does have higher interest rates (APR). View short term loans here
If you need to borrow a larger sum of money and are a homeowner you can use the equity in your property to usually get a larger loan and better interest rates. Your home is at risk if you do not keep up with repayments. View secured loan options here
Whether you are looking to buy a new home, remortgage your current property to get better interest rates or to release equity from your property you can easily compare your mortgage options here
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How to apply for a loan
Using our service, you will receive a decision on your personal loan application in minutes and the application process is simple. You can receive a decision when you enter the following;
Financial incomings, outgoings and dependencies
Our lenders will carry out a soft search with credit reference agencies so that they can give you a personal quotation. Although you will be able to see this search on your credit file, others won't so your credit file will not be affected by entering your details and viewing the results.
What should I consider when taking a loan?
When taking out a loan you should think if it will be suitable for you, not just for the short term but for the whole duration of the loan. You need to be sure that a loan is the most sensible way to borrow or could there be any other credit options such as an overdraft, interest free credit card, secured loan or remortgaging your property.
You should never borrow more than you can afford to pay on day 1 of the loan. Do not rely on a promotion, commission payments or a pay rise to cover the cost of the loan, because if these do not happen you could be is worse financial situation than before you took the loan.
We can offer personal loans from £1,000 - £35,000 and secured loans from £10,000 to £250,000 so the loan amount will be dependant on your circumstances and what the loan is for. You need to ensure that the loan amount covers the purpose of the loan but to avoid paying more in interest you don’t want to over borrow. If debt consolidation is used as an example - If you the loan amount doesn’t clear the debt, could you afford to pay for loan and the repayments on the outstanding debts, if you couldn’t then you should seek an alternative to a personal loan.
Repayment periods for personal loans are shorter than secured loans, the repayment period is 1 – 7 years for a personal loan and a secured loan can be up to 25 ears. The repayments are fixed over the duration of the loan term and the longer you take the loan for, the more interest you will pay but on some loans you can make over payments and pay the loan off early
The APR is the Annual Percentage Rate, and it shows a 12 month summary of the cost of the loan based on the variables you have entered. The APR includes any fixed fees associated with the loan and the interest charge, the fees could be an arrangement / application / product fee but wouldn’t include any penalty fees that could be incurred from missed or delayed payments.
The APR is based on the variables you have entered and your credit score, it is a percentage specifically for you and is risk based pricing, so you can be confident that the APR rate you see on the results page is the APR rate you will receive.
An advertised representative APR is not the rate you will be offered, this is based on the rate that a lender realistically expects the majority (51%) of its customers to receive. The representative APR tends to be a better rate than the remaining 49% would be offered so unless your credit score is very good it is unlikely you will receive this rate. This is why an APR can be confusing and why we use a soft search on your credit file which means you can see an application has been made but the lenders will not so it will not affect your credit score.
Fixed or Variable Rate
As the name suggests, the interest charged is either fixed or variable which in turn means the repayments are either a fixed amount every month that was agreed when you took the loan out or the monthly repayment amount could increase or decrease at the lenders discretion. Usually the variable interest rate is linked to the Bank of England’s bank rate but the lender is under no obligation to increase or decrease their rate just because the Bank of England does.
How long will it take to get the money into your bank account? If you need the money urgently you may be limited to the lenders that will give you the money the same day or the next day. Try and plan in advance if possible so you can compare as many lenders as possible to ensure you are getting the best rate.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT
What happens next
This will depend on the product, for a secure loan, you will receive a phone call to ensure this is the best loan for you, however if you are looking for a personal loan, the application can be fully completed online and the money will be in your account as per the lenders terms
What happens if I am refused a loan?
We do everything we can to match you with a lender, the interest rate might be higher than you were hoping but we are proud to be able to offer a solution for the vast majority of people. If you are refused a loan though, you should first look at ways to reduce your monthly outgoings because lenders look at your affordability to repay the loan, another thing to consider is borrowing a smaller amount or asking a friend or family member to be a guarantor.