Choosing the loan option that works best for you
If you’re in the market for a personal loan, our lenders offer several options. With competitive rates and flexible terms, these loans are designed to meet your needs—and save you money.
What are the possible uses of a personal loan?
Personal loans can be used to take care of a wide variety of different expenses—from medical bills, school fees and holiday costs to buying a vehicle. Personal loans are typically unsecured but can also be secured (meaning you put up property as collateral).
If you want to borrow money and pay it off over time, a loan may be right for you. First, make sure that the lender is reputable—then shop around to find the one with rates most suited to your needs.
If you take out a personal loan, make sure that you have no other options before doing so. Personal loans can be disastrous to your credit rating and put you in debt for years if used irresponsibly.
The growth of personal loans and overdrafts, delivered by the United Kingdom’s leading high-street banks, increased 3.8% annually between May 2018 to May 2019. Personal loans saw an increase of 14.0% during December 2019 compared to the same period in 2018, according to a recent household debt update.
List of personal loan lenders
The two main reasons people take out a personal loan
- A personal loan gives the borrower freedom to use the money however they want. Home and car loans are used to purchase property or vehicles. Personal loans, on the other hand, allow you more freedom in how you spend your money.
- Lack of collateral is not only acceptable, but expected. Personal loans can be unsecured and therefore attractive to customers who may not have the money or property they could use as a form of security in order to obtain a loan elsewhere.
How can you get the best personal loan possible in the UK?
- Review your credit history before applying for a loan or line of credit. Check it regularly to identify signs of identity theft and ensure that all listed items are correct, since bad marks on your record can affect the amount you’re allowed to borrow.
- Don’t limit yourself to dealing with one lender—shop around and get multiple loan offers. A broker can help you find the best deal for your situation, as well as negotiate down any unreasonable fees or rates.
- When you are looking for a loan, always compare the total cost by determining how much interest you will pay over time – this is called APR (annual percentage rate). It includes both the specified interest rate and any fees that may apply.
What are the advantages of a personal loan?
- They offer larger loan amounts than short-term loans or credit cards.
- They have fixed payments, which makes budgeting easier.
- Interest rates will be more favorable to those with better credit ratings.
- You can choose the length of your loan. The shorter the term, the more often you’ll have to make payments; a longer period means fewer but larger monthly installments.
- You can use a consolidation loan to combine several debts into one and reduce the number of payments you need make every month.
- You can pay extra on your debt to reduce the total cost of paying off that debt.
Here are some things to consider before you apply for a personal loan
Personal loans have a grace period in which you can cancel without penalty. – In the UK, every personal loan comes with a 14-day cooling off period. If you change your mind about taking out a loan during this time and decide that you want to cancel it, no problem! The lender will take back any payments made towards interest on the amount of credit extended.
Loan insurance products can rescue you from financial ruin. – When unforeseen circumstances prevent you from being able to make your loan payments, mortgage insurance can help. Be sure to research all types of coverage thoroughly and get an estimate for how much each type will cost.
Your current income and future earnings potential must be sufficient to carry the loan’s repayment burden. – Be sure to list your expenses and create a budget so that you understand where all of your money is going—and whether or not you can afford a personal loan.
The published interest rate may not be the one you receive. – The “representative” APR—which is shown in ads as the interest rate that applies to 51% or more of applicants, so you may not qualify for it if your credit rating isn’t excellent.