Are you in need of an extra boost of cash? If you want to borrow money and pay back a fixed amount every month, loans like personal loans are an option.
What are personal loans?
Personal loans allow you to borrow a fixed amount of money from a lender. You will then decide to pay it back over a set time period in fixed monthly repayments. Most banks, lenders and brokers offer personal loans up to about £25,000. But, you will find an occasional lender or broker like Simple Personal Loans who offer them up to £35,000. Although, to get one at an amount this high, you must have a great credit score to prove you can repay the unsecured loan. With a personal loan, repayments are usually spread over a fixed period of one to six years. This depends on your personal circumstances, but the lender or broker will be able to get the information they need from factors including your credit score and details on your application.
Am I eligible for a loan?
You’ve reached the point where you feel a loan is the best option for you right? Thankfully, there are lots of things which you can do to increase your chances of being accepted by a lender. As well as that, there are a lot of things which different lenders might be more lenient about than others. So, please consider that if one lender declines your application, that doesn’t mean you will be declined by another. For example, some are happy to accept people with low/bad credit scores as they are able to raise the annual percentage rate (APR) offered or even lower it for those with a good credit score. Others won’t accept applicants who don’t meet their own criteria due to the risks which go hand in hand with things like this.
The criteria which every lender and broker needs can vary. Some might ask for more information on the application than others do. But, this all just depends on the individual lender or broker and what their requirements are. Yes, they do vary but overall, the don’t way too much. As followed is one of the most common criteria which includes the majority of factors which play a part in the decision:
- Be aged 18 or over
- Be employed or have a stable source of income
- Live in the UK or be a UK resident
- Have an active bank account
- Have a valid debit card for this account
- Hold a valid email address and phone number
What can I use personal loans for?
Hence the name, personal loans can be used on anything. They are for personal use so they don’t have one specific use unlike other types of loans do. Although you can just them on whatever, we strongly advise you don’t borrow for things like gambling and addiction as it could impact your chances of repayment which can cause further serious issues. Here is an example of the most common uses of personal loans, please note it is not limited to this:
- Holiday Loans
- Home DIY Loans
- Car Loans
- Debt Consolidation Loans
- Homeowner Loans
- Wedding Loans
What if I have bad credit?
Having bad credit can seriously impact your eligibility for a loan. Although, some lenders and brokers will investigate your ability to repay the loan based on your present-day circumstances as well as looking at your credit history to see if there is any way you would be able to repay without any struggle. The main thing we advise is to try your hardest to increase your credit score or even just try to start to understand your credit score. This way, you might even get to pay less in interest depending on the lender.
Brokers tend to be a better option when applying for a loan in general, not just a bad credit loan. This is because they deal with a large number of lenders so they are more likely to be able to find you the loan you want. Plus, if you are applying with bad credit, there aren’t many lenders who will lend to you, so it saves you the time of looking for who will.
Read more about ‘How To Improve Your Credit Score‘ here.