Whether it's funding home improvements, or getting through a lean period, the best loans can give you the flexibility you need to stay on top of your finances.
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Using our loan comparison you can find our best loan deals available. By comparing loans you know what's available in the market and ensure that you get the best deal for your needs.
Choose the loan deal you want
Pick a deal that offers you the lowest interest rate and a term long enough to afford the monthly payments, while also ensuring you don't pay too much in interest overall.
Fill out an application
Once you've found a deal, you can fill out a loan application form, providing name and contact details, as well as financial details. The lender will then assess your affordability for the loan.
A personal loan is a good option if you want to fund a holiday or an home improvement project. They let you borrow a fixed sum of money and pay it back in fixed monthly instalments.
A car loan is a loan you take out to purchase a car. The loan is secured against the vehicle you intend to purchase. This means that if you are unable to make repayments and default on the loan, the lender can seize the vehicle.
Bridging loans are useful when you need to pay for something but are waiting for funds to become available, for example, waiting for the sale of another property to go through.
Business loans are similar to personal loans, but are specifically designed for business use, for example buying more equipment or expanding the business.
Debt consolidation loans allow you to borrow money to pay off several debts, by combining them into one so there is only one monthly repayment to make.
To get a loan, UK wide, you must:
Be at least 18 years old
Be a UK resident, with proof of address
Provide proof of your income
Pass a lender’s credit check
Most providers have their own assessment criteria so a particular provider may give more weightage to certain criteria than another.
These require some type of security, such as a car or home, which you borrow against. This improves your eligibility and also allows you to borrow more. But it does put your car or home at risk of repossession, if you're unable to keep up with repayments.
These loans are granted (or not) based purely on the borrower's credit score and their ability to pay the money back. You may not be able to borrow as much, but you don't risk losing your assets if you're unable to repay the loan.
The amount your loan will cost you will be dependent on the APR, the term you choose, and the fees associated with your loan.
Some common types of fees include:
Application fee – pays for the process of approving a loan
Processing fee – similar to an application fee, it covers the costs associated with administration
Origination fee – the cost of securing a loan (common for mortgages)
Late fee – this is what your lender will charge you for late payments
Broker fee - using a broker will incur a fee for services like negotiations, sales, purchases, communication with lenders, delivery and advice on transactions.
You can use our loan repayment calculator to help you work out what a loan may cost you.
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Check your eligibility
Work out what you’re likely to be accepted for before you apply. It’ll save you time and it means your credit rating won’t be affected by applying and being rejected.
Calculate the amount you need
Work out how much money you need. Don't borrow more than you need or more than you can afford to pay back.
Compare interest rates
You’ll be offered an interest rate based on your credit history. Each lender will offer a different rate so you’ll need to pick one that works for you.
Know how long you need to repay the loan
The longer the term, the lower repayments will be. But you'll pay more in interest if you take a long time to pay it off.
Watch out for fees
Check the small print. Even the cheapest loan companies can charge fees for processing the loan, making extra repayments or paying the loan back early.
Secured loan providers
Internet loan providers
Supermarkets and high-street stores
You should always shop around to find a loan provider that can offer the best deal for your circumstances.
Loans providers base the amount you can borrow and the interest rate you are offered on an assessment that factors in your income, your financial assets (savings, investments, possessions of value, etc.) and your credit history.
It also depends on the kind of loan you get. With a personal loan, you can typically borrow up to £25,000. With a secured loan you can usually borrow a lot more, up to £250,000 or more.
A lender will only provide a loan if they are reasonably certain it will be repaid.
As your credit score helps lenders determine your level of risk, improving that score will help you qualify. Generally, the higher your credit score, the more likely you are to qualify for a loan. Your credit score may also impact the interest rate you're offered.
You will need to present proof that you have sufficient income to repay the money borrowed, plus the interest and additional fees.
You can apply for a loan online, over the phone, by post, or, if applying with a bank, by visiting a branch. You will also need the following documents for proof identity and income:
You will also need to provide the following documents for proof identity and income:
Some sources income are not accepted by certain lenders when assessing your eligibility. Some examples of these are:
Reimbursement for expenses
Maintenance payments from an ex-spouse or partner
Rental income from any buy-to-lets that you own
Benefit payments – child benefit, universal credit or jobseeker's allowance (JSA)
You will usually be required to provide your three most recent bank statements and payslips that can prove your income.
"Taking out a loan should never be a quick and uninformed decision. Before you take out a loan, know how much you need and how much you can afford to repay monthly. It's important to borrow only what's needed for your intended purpose, such as paying off debt, or financing home improvements."
Assess whether you can afford the loan
Have a plan for how you intend to meet your monthly payments.
Failure to repay an unsecured loan will result in additional interest and late fees added to the loan.
Worse – it will make it harder to repay the money you owe, and the lender can apply to have a county court judgement (CCJ) or bankruptcy order made against you.
This will have a hefty impact on your credit score, making it extremely difficult to secure a loan in the future.
UK residents had debts totalling £1,721.3 billion at the end of May 2021. This is an increase of £46.7 billion from £1,674.6 billion at the same time last year. It equals to an extra £882 per UK adult over the year¹.
Applying online can take minutes if you have your details ready. Some secured loans take longer as the lender will need to value your property.
If your application is approved it could be in your account within 24 hours. However, some lenders take up to 5 working days to transfer the money.
It is an interest rate that at least 51% of borrowers will get if accepted for a loan. The other applicants can be offered a higher interest rate instead.
No, while most unsecured personal loans offer fixed rates, some secured loans offer variable interest rates that may change.
Most loans can be used for almost any purpose. Some cannot be used to pay other debts, for buying property or land, or for gambling or investing.
Yes you can apply for a loan with someone else, but you will both need to meet the lending criteria and may have to live at the same address.
If you don’t have a strong credit rating or if you are borrowing a substantial amount of money, you may have to secure the loan with an owned asset, such as a car or a property (secured loan).
Some loan providers penalise you if you try to repay your loan early by applying an early repayment charge (ERC).
Generally, the earlier in the term you repay your loan, the higher the charge you may incur.
You could be fined by your lender and it will end any low interest incentives . It can also leave a negative mark on your credit history. This can lead to higher interest rates for any loans you want to take out in the future.
A repayment holiday is when you don’t make repayments on your loan for a period agreed with your lender. These are useful if your personal circumstances change, such as losing your job.
When you miss a payment on your loan, you'll be charged a fee. You may be issued with a County Court Judgement or have to declare yourself bankrupt if you continue to miss payments.Read More
Comparing loans could help you save money. Our award-winning loan comparison service makes sure you get our best interest rates. Our aim is to provide you with the most up-to-date information, as well as useful tools and calculators so to help you make life's most important decisions and take control of your money.
We have always aimed to provide the best possible services to bridge the gap between our users and our clients. Over the years, we have been thrilled to be recognised by various prestigious bodies and organisations for those efforts.
¹Data based on the The Money Statistics July 2021 report by The Money Charity
Last updated: 23 August, 2021